Corn rally prompts EU to cut corn and sorghum import duties

The recent rally in US corn prices has seen the European Union reassess its grain duties, slashing its tariff to €0.56/mt from €5.61/mt for corn and sorghum, the bloc’s Official Journal said Friday.

The run up in corn prices – driven by a strong demand and recent surge seen across the agriculture space – has been enough to tip the balance on the calculation behind its import duty.

The EU sets its corn tariff based on prices it observes in the US physical market, with freight to Rotterdam and the euro/dollar exchange rate deducted from a minimum intervention price.

The European Commission had previously raised its import duty earlier in the marketing year on the back of low US prices which were compounded by a strengthening euro.

The previous import tariff, which had been in force since October 2017, had not been enough to slow down EU corn imports which are up almost 50% year-on-year at 10 million mt.

This latest change leaves the door open for even more corn to make its way into the EU.

The EU is a net importer of corn, which competes with feed wheat and soybeans as an animal feed, with Spain, the Netherlands, and Italy the bloc’s biggest corn buyers.