The U.S. Grains Council and the United Sorghum Checkoff Program have succeeded in a year-long effort to resolve trade issues that have made it difficult to sell U.S. sorghum to Europe. The problem was the EU levy system – which was becoming increasingly archaic when it came to establishing a reference price for sorghum. Because of the system – the levy on U.S. sorghum inched up – pushing sorghum prices in Europe higher than the price of corn on occasion.
According to Cary Sifferath – USGC Regional Director for the Mediterranean and Africa – the problem was the EU needed a different reference. After issuing a white paper that showed how sorghum correlated better with #2 corn than with barley – the Council petitioned the EU for a rule change. That new rule is now in place and the Chicago Board of Trade price of corn will now be the reference point for determining the sorghum levy.
Sifferath emphasized that when Europe is short of grain – the sorghum levy will be calculated on a realistic basis that reflects real-world prices. Whatever the market dictates – the sorghum levy will reflect it – and European buyers should be able to import sorghum readily – without weeks of dispute over the levy.