EU eyes 'symbolic' duties on US corn, competition for other supplies to rise

The European Union's proposal to impose duties on modest US corn imports would not cause major pain for European importers or American exporters, experts said on Monday, as Brussels draws up its response to Washington's plans for tariffs on metals. But it could leave EU importers facing stronger competition as they seek alternative supplies in coming months due to heavy buying by China and problems with crops in South America, a major producer of corn, which is also known as maize.
The European Commission called on Friday for industry views on a list of US products it could subject to 25 percent import tariffs, including corn, as part of its measures to respond to planned US import duties on European steel and aluminium. "I regard the possible EU import duties on US corn as symbolic," said Commerzbank commodities analyst Carsten Fritsch. "The small volumes of corn imported by the EU from the United States could probably be replaced without major problems, and an import duty would not really hurt the US much either."
The EU has imported 368,000 tonnes of corn from the United States from July to mid-March, during the current 2017/18 grains season, EU data show. That makes up just 3.1 percent of total EU corn imports, far behind the 5.1 million tonnes imported in the period from Ukraine and 5.0 million tonnes from Brazil. In the previous season, the EU imported just under 800,000 tonnes from the United States.
"Maize imports from the United States do not represent much in the overall volume imported each season by the European Union," said Andree Defois of French analyst Strategie Grains. The EU usually imports about 1 million tonnes a year from the United States, out of total imports of 15 million tonnes, she said, adding US genetically modified (GM) maize varieties were "refused by many industrial users, with the exception of Spain."
Strategie Grains expects EU nations to produce 59.9 million tonnes of corn in the 2017/18 season, meeting the bulk of the EU's needs. From the US side, EU sales are set to make up a small portion of the almost 63 million tonnes of US corn the US Department of Agriculture (USDA) forecasts will be exported in 2017/18. "US corn exports have also been booming in recent weeks and the US has no shortage of purchase interest," Commerzbank's Fritsch said.