The European Union kicked off the 2005/2006 grain campaign giving mixed signals for its export policy as it granted subsidies for free-market wheat and allowed hefty sales of intervention barley from Germany. The EU's weekly management committee also rejected all bids to transfer intervention grain stocks to Spain under special tenders set up to relieve a severe drought in the country.
It granted wheat subsidies at four euros a tonne on 78,000 tonnes of free-market wheat but rejected bids to export free-market barley.
However, it sold more than 200,000 tonnes of barley from German intervention stores at around 100 euros a tonne.
"For barley, it shows the tightness in the market," analyst James Dunsterville of AgriNews in Geneva said.