The European Commission has proposed to suspend import duties on certain cereals imported into the EU until the end of June 2011 in order to ease the pressure on the EU market, especially for animal feed. Backed by Member States on 17 February within the Management Committee, this decision aims to help maintain a good balance on the EU market. The suspension relates to existing tariff rate quotas for low and medium quality soft wheat and for feed barley, and reduces their respective preferential tariffs to zero for the volumes under the quota.

With this decision, taken within the Management Committee, the European Commission hopes to reduce the tensions on the European cereals market. Despite de forecast made in August 2010 on crop production, the outlook for the world cereals markets in 2010/2011 suggests that prices will remain high, given that world cereals ending stocks will be 62 million tonnes lower than at the end of the last marketing year.

In order to avoid penalising traders who have cereals en route to the Union, transport time will be taken into account. This means that, as long as transport to the Union is underway by 30 June 2011, at the latest, traders will be allowed to release the cereals for free circulation under the proposed customs duty suspension regime.

The formal regulation regarding import duties suspension will then have to be published in the Official Journal of the European Union.

EU's cereals import duties system

Under World Trade Organization (WTO) rules, the EU has bound tariffs for all cereals, but the applied rates are different depending on its type. The duty is fixed on the basis of the difference between the effective EU intervention price for cereals, multiplied by 1.55 and a representative CIF import price for cereals at Rotterdam.

For medium and low quality soft wheat, there is an "erga omnes" annual Tariff Rate Quota of 2.989.240 tonnes at an import duty of 12€/t. Within this overall volume, there is a specific country-specific quota of 572 000 tonnes for imports originating in the United States and 38 853 tonnes for Canada. The remaining 2.378.387 tonnes is split into four equal tranches of 594.597 tonnes, one of which is open each quarter to other third countries. For feed barley, there is an annual Tariff Rate Quota of 306.215 tonnes with a duty of €16/tonne.

The suspension now decided by the Commission relates to existing tariff rate quotas for low & medium quality soft wheat and for feed barley, where the preferential tariffs of 12 €/tonne and 16 €/tonne respectively will be reduced to zero for the volumes permitted under the quota.