A combination of high ingredient prices and aggressive U.S. Grains Council marketing efforts is producing renewed sales of U.S. sorghum, corn gluten feed (CGF), and distiller\u00e2\u20ac\u2122s dried grains with solubles (DDGS) into the European Union (EU).<\/p>\n
Sorghum shipments, primarily bound for Spain, with smaller shipments to France and the Netherlands, stood at 458,000 metric tons (18 million bushels) as of March 10. Outstanding sales totaled an additional 223,000 tons (8.8 million bushels). <\/p>\n
\u00e2\u20ac\u0153This tells you that [European] feed ingredient prices are very high,\u00e2\u20ac\ufffd said Chris Corry, USGC senior director of international operations, who noted the EU is releasing feed barley from its intervention stocks and has dropped its import tariff on sorghum.<\/p>\n
Getting the tariff eliminated was a direct result of Council efforts, according to Corry.<\/p>\n
\u00e2\u20ac\u0153We sent in Council staff and consultants to meet with the EU levy commission, and we proposed a different way to calculate the levy,\u00e2\u20ac\ufffd he reported. \u00e2\u20ac\u0153Right now, it reflects a lack of understanding of U.S. barley and sorghum price relationships. So far, the levy commission has eliminated the levy but won\u00e2\u20ac\u2122t adjust how they calculate it until their new crop year begins July 1.\u00e2\u20ac\ufffd<\/p>\n
The current easing is also due, in part, to the EU\u00e2\u20ac\u2122s approval of all the single corn biotech events with U.S. approval, which occurred late in 2009, according to Cary Sifferath, USGC regional director for the Mediterranean and Africa, adding, the EU will continue to be a problematic market as new biotechnology events and stacked traits await approval.<\/p>\n
The tide of U.S. sorghum sales could also change if Europe has a good crop year. Sifferath recently traveled to Europe to assess the outlook for export competition from Russia, the Ukraine and the Black Sea region.<\/p>\n
He found European grain traders fairly confident that Russia will produce 80-85 million tons of grain in 2011 but will not re-enter the export business until the government has a good handle on actual grain production. That could be as late as October, and some traders suggest Russian exports might still be restricted as the country rebuilds its reserves.<\/p>\n
In Ukraine, there are proposals that would only allow state-owned companies with a specific level of state ownership to export grains. Added to current export restrictions, that is discouraging new investment in grain production, storage and handling, and many multinational grain traders are looking to Eastern European countries like Romania, Bulgaria and Hungary to source wheat, barley and corn for their export customers.<\/p>\n
U.S. co-product exports to the EU have also increased.<\/p>\n