BRUSSELS (AFP) — The European Union, traditionally a major cereals exporter, sought on Tuesday to ease tight supplies by agreeing to suspend imports duties.
The European Commission proposed suspending import duties for this marketing year, ending June 30, 2008, which won unanimous support from EU farm ministers meeting in Brussels, the bloc's Portuguese presidency said.
In the face of dwindling cereals supplies but soaring prices and demand, Portuguese Agriculture Minister Jaime Silva said: "There was unanimous approval for the proposal."
The suspension of import duties, which would apply to all cereals but oats, could be implemented in December once some technical issues are dealt with and it gets formal approval.
The measure is one of several actions the EU is taking in response to the tight cereals market along with suspending a requirement that farmers leave some land fallow each year.
EU Agriculture Commissioner Mariann Fischer Boel said that although import duties were low, running at less than 10 percent of prices, the suspension would provide relief to a tight market.
"We have seen a modest harvest in Europe and high prices both at home and on world markets," Boel said ahead of the decision.
"Border protection for cereals is relatively low, but import duties still apply to certain cereals which are key to assuring EU market balance," she added.
For years, Europe has produced more cereals than it needs, leaving the EU to buy up the excess and discourage more planting in order to stop prices collapsing and farmers going out of business.
But Europe became a net importer of cereals this year amid a global commodities boom, driven by surging demand in fast-growing developing countries including China.
The increasing use of farmland to grow crops for biofuels and drought in major farm producers such as Australia has added further pressure on the market, driving food prices ever higher and pinching supplies for raw ingredients.
As the global grain market grows tighter in the face of surging demand, EU farm ministers are becoming increasingly concerned about how to ensure a steady supply of such a key raw ingredient.
The grain shortages have in turn driven up food prices and even caused pasta makers in Italy to hold protests against the soaring price of their main raw ingredient.
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