EU Needs To Step Up Grain Imports

The European Union needs to step up imports to fill its huge supply deficit in the current 2003 season, but grain prices are unlikely to fall, European analysts and traders told Reuters News Service on Friday.

"The tightness in the market will remain," French analyst Strategie Grains said. Prices in Europe have risen about 50% since the season's start despite the suspension of export tenders. French wheat is now above $200 per metric ton FOB Rouen, around $40 above U.S. prices.

Traders told Reuters prices would remain supported by internal demand and tight world supplies. "We are entering a period of rising need by the main importers. Globally the market is very badly covered," a trader said.

"North Africa is believed to be covered until the end of January, and after that they've got nothing," he said.

According to the EU's latest figures, the bloc has imported just over two million tons of soft wheat this season, including 190,000 tons last week, and 1.64 million tons of corn, including 187,000 tons last week.

But much more is needed to make the EU's balance sheet work, analysts say. Strategie Grains estimates that four million tons of wheat, including three million from North America, will be needed by the end of the season.

Editors note: Richard Brock, The Corn and Soybean Digest's Marketing Editor, is president of Brock Associates, a farm market advisory firm, and publisher of The Brock Report.

To see more market perspectives, visit Brock's Web site at www.brockreport.com.