EU Resumes Wheat Export Subsidies
The European Union on Thursday announced it would reinstate wheat export subsidies for the first time since 2003 in response to demand from EU exporters.
The EU grain management committee agreed to open a tender for export rebates on two million metric tons of wheat. Bids will be taken in the tender starting January 28 and the first results will be announced on February 3.
While the direct impact on wheat prices from the EU move may not be big, the resumption of subsidies is clearly not good for the wheat market from a psychological standpoint.
The wheat trade had believed that the EU’s pledge to eliminate export subsidies as part of the next round of world trade reforms would keep it from bringing back rebates. The move is sure to escalate trade tensions with the U.S. and other wheat exporting nations.
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.