SUBSCRIBE

Breaking News on Food Marketing and Retailing

Headlines > Financial

EU cereal prices to remain high and volatile, says Commission

By Oliver Nieburg , 03-Sep-2012
Last updated the 03-Sep-2012 at 18:25 GMT

The European Commission has forecast EU cereal prices to remain high and unstable and is wary of the destabilising effects of other commodities such as maize and wheat.

Forecasts were presented to EU member states in the Management Committee on Thursday last week.

Global carryover stocks down

In spite of drought in certain member states, the full year EU cereals forecast is set to be only 2% lower than the average over the past five years at 279 million tonnes.

Soft wheat is forecast to remain near the five year average at 127m tonnes.

However, world carryover stocks are set to fall by 33m tonnes to 338m and the stocks versus consumption ratio remain largely unchanged on last year, which is likely to keep prices high, said the Commission.

Maize putting pressure on wheat

Dacian Cioloş, the European Commissioner for Agriculture and Rural development said:  “Over the past weeks, the drought in several regions of the world has led to dramatic price increases for certain commodities, mainly maize and soya which risk destabilising certain sectors of the European agriculture.”

Jack Watts, senior market analyst, for the Agriculture and Horticulture Development Board (AHDB) and the Home Grown Cereals Association (HGCA) told BakeryAndSnacks.com last month that bakery and snack manufacturers can expect higher wheat prices in the coming months as a US drought has hit the maize market putting pressure on wheat supplies.

Cioloş said: “This excessive volatility of markets shows clearly that world agriculture requires investments, public management policies and predictability.”

The EU is in the process of revising the Common Agricultural Policy (CAP), which is expected by 2013.