Confirmed: price of wheat will not go up

By Matthew Vella

The Malta Financial and Business Times can confirm a USA-EU agreement reached last week on the import system for wheat and feed grains from the USA has avoided what could have been a restriction of more than $400 million worth of USA grain exports.

This move has effectively guaranteed that Malta’s entry into the EU will not in any manner affect the prices Malta currently pays for US wheat. This has also assured the long-term access of US wheat to the EU market under the system that has so far guaranteed import levy-free wheat.

Malta’s accession into the EU will therefore not affect the prices the country pays for American wheat.

This agreement also shot down any doubts as to whether Malta’s entry into the EU or refusal to join would be contributing to an increase in prices.

Opposition spokesperson for Agriculture Noel Farrugia had originally questioned Government’s reasons for EU accession after presenting statistics in Parliament during the Small and Medium Enterprises showing EU import tariffs would burden the consumer with an increase of 48 per cent on food prices.

The Malta Financial and Business Times can now confirm that wheat prices will not be suffering from any sort of import levies if Malta joins the EU through the special arrangements the EU has reached with its US counterparts.

Representatives from US Wheat Associates, which represents US wheat farmers’ global export interests, were recently in Malta to discuss the international wheat situation with the government and industry. Malta currently purchases approximately 80 per cent of its wheat from US Wheat Associates.

The USA-EU agreement is proof that wheat prices will not be affected by EU entry, because import levies will not be administered on wheat imported from outside the EU. MIC officials had previously said in other reports that only a special agreement between the government and the EU could stop wheat prices from rising.

Although Government will be expected to go ahead with a special agreement on import levies with regards to wheat, the USA-EU agreement appears to have to laid to rest any doubts on the future of wheat prices.

The agreement means European buyers and consumers have been guaranteed stale prices, as well as safeguarding the interests of American producers and wheat organisations. Europe has for long been a vitally important export market for US wheat, importing over two million tons during the last marketing year.

US Wheat Associates were in fact vehemently opposed to any proposal that would impede US access to EU markets.

This has however not precluded the reality of other factors affecting wheat’s price stability. International market prices will still remain overarching and responsible for any fluctuation in international prices. US wheat prices have in fact risen by 50 per cent since May of this year.