Grain offers to EU intervention stores plummet

10 Jun, 2006

High grain prices, active markets and smaller crops have led to low offers into European Union intervention stores in 2005/06, with the total almost equal to the amount of grain leaving the stores, traders said on Friday.
Most EU publicly-funded intervention stores open in November and give farmers a chance to sell their grain for a guaranteed price of around 100 euros per tonne until the end of May.
The European Union's intervention stores have received net offers totalling 9.7 million tonnes of grain against 15 million in 2004/05, official data show.
A total of 9.19 million tonnes have left the stores, with the export season closing at the end of June.
"Offers into intervention are lower mainly due to a smaller EU crop, active exports and a subsidy-led policy from Brussels," a French trader said.
Total offers comprised 4.01 million tonnes of maize, 3.16 million of wheat and 2.51 million tonnes of barley.
Almost half the EU's stocks are held in landlocked Hungary, which has struggled to shift its grain.
"For the grain stored close to the Danube ports, it's not so much of a problem but it's a different story for the rest," a trader said.
"The country has to deal not only with its logistical woes but also with the anticipation of storage capacity problems following the arrival of the new crop," he added.
Three quarters of Hungary's stocks are made up of maize, which is harder to store than wheat or barley as it deteriorates more rapidly.
Germany comes second to Hungary with 1.9 million tonnes offered to intervention, down from 4.4 million submitted last season due to high commercial prices.
The volume of grain offered into French intervention stores at the end of the season was sharply down from around 2.5 million tonnes last year. Offers stood at around 660,000 tonnes almost evenly split between wheat and barley.
"As anticipated, offers into intervention have remained limited this year thanks to...the dynamism of our sales," the head of France's arable crop office ONIGC said this week.

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