EU Seen Using More Wheat Subsidies
The European Commission is likely to continue with a policy of granting subsidies on wheat exports for the foreseeable future as it tries to avoid the build-up of costly EU-funded stockpiles, member state sources told Reuters News Service on Friday.
The Commission granted 547,000 metric tons of wheat for
export on Thursday with a four euro refund, the first time it has given subsidies on wheat since August.
The move boosted French wheat prices, while U.S. prices fell to new four-month lows immediately after the news.
But with EU wheat exports moving at a sluggish
pace, the Commission believes granting subsidies at a
relatively low level now would be cheaper in the long run than allowing intervention stocks to swell.
"There is no alternative. It's a four euro subsidy now or
much more in the future, and very much more for intervention stocks," one member state source told Reuters.
Editors note: Richard Brock, 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.