EU awards low wheat subsidy, sells stocks

The European Union awarded 154,000 tonnes of free-market wheat for export on Thursday and sold a total of 63,210 tonnes from intervention stores in landlocked central European countries, officials said. The free-market wheat was sold with an export subsidy of 3.90 euros a tonne against a refund of 8.94 euros at the last award two weeks ago. There was no EU decision last week due to the Easter holidays. Exporters have criticised the European Commission for not being aggressive enough with export refunds on wheat and risking a huge stock overhang at the end of the season.
"It's absolutely necessary that it (the Commission) grants export refunds that will allow on average 450,000 tonnes to be exported," French grain growers' groups said this week.
"If not, it risks provoking strong sales into intervention which will lead us to a depressing start next season." The intervention wheat sales, the first under a decision taken last month to ease the pressure of large stocks in central Europe, were made for 63,210 tonnes of wheat at prices ranging from 89.90 to 95.39 euros.
It only sold wheat from Austria and the Czech Republic and rejected bids for wheat stored in Hungary and Poland.
The EU has put some 800,000 tonnes up for sale from four landlocked countries - Hungary, Poland, Czech Republic and Austria - via weekly tenders scheduled to run to June 23.
In a report issued in mid-March, French analyst Strategie Grains said actual exports from the intervention stores could fall short of the full tender amounts allocated due to the wide geographic spread of the grain.
The EU's intervention grain stocks have continued to climb over the past weeks and now stand at 11.65 million tonnes, with some 6.49 million tonnes in wheat. A lot of the wheat is held in stores in the EU's new member states - Hungary has offers for over 1.5 million tonnes - where capacity shortages in the wake of this season's big harvest have caused problems.
The EU said on Thursday it would extend the minimum delivery period for intervention grain in the new members from four to six months to help them cope with the large flow of supplies.
And in Hungary, the Agriculture Ministry said intervention offers could rise by up to one million tonnes in April as new government guarantees freed up stocks currently tied down by commercial loans.