Free trade and trade tariffs are in the spotlight on the grain market. Trump's import duties on products from Canada and Mexico seem to be postponed for another month. He did announce that he would introduce a broad import duty for the EU in the short term. The EU top is currently in India. President of the European Commission Von der Leyen has traveled to New Deli with a heavy delegation to negotiate a free trade agreement, among other things.
The March wheat contract on the Matif lost €2 yesterday, closing at €223 per tonne. Prices on the CBoT were also under pressure. Wheat was the biggest loser, losing 1,2% and closing at $5.66 per bushel. Corn lost 0,3%, closing at $4.78¼ per bushel. Soybeans lost 0,7% and closed at $10.24½ per bushel.
US President Donald Trump is keeping players on the grain market busy with his trade tariffs. After threatening earlier this week to impose a 4% levy on products from Canada and Mexico starting on 25 March, he announced yesterday that he would postpone it until 2 April. This would be the second time that the implementation has been postponed. Trump originally wanted to impose a trade barrier at the beginning of April. In passing, Trump did announce that there would be an import levy of 25% on products from the EU in the short term. Trump lashed out and stated that 'the European Union was founded to screw the United States'. Trump is not worried about possible countermeasures from the EU. "They can't do anything", according to the US President.
Summit meeting in India
Meanwhile, European Commission President Ursula von der Leyen has travelled to India with a large delegation. In New Deli, discussions will be held on a free trade agreement between the EU and India. With mutual trade worth over €130 billion in the 2023/24 financial year, the EU is India's largest trading partner. The EU would like to see India reduce the 100% to 150% levy on European cars, wine and whisky. India, in turn, is strongly opposed to the European levy of 20% to 35% on goods that release a lot of CO2 during production, such as steel and cement. For the EU, this levy is an important part of the green strategy. Agriculture is also a point of contention. The EU would like to see India abolish the 35% to 60% import duties on agricultural products. India fears that the millions of farmers in the country will suffer unfair competition from subsidised European agriculture.
The summit seems to come at a favourable time, especially for both the EU and India. Both blocs want to become less dependent on China and with Trump in the White House, the role of the US on the world stage has also changed. Several analysts are therefore talking about 'the two largest democracies in the world seeking rapprochement'.
China's wave of cancellations
China caused unrest in the wheat market yesterday. According to various sources, Beijing is said to have cancelled the import of three or four shipments of wheat from Argentina. This follows the news earlier this month that nine or ten shipments from Australia had been cancelled. This is somewhat reminiscent of almost a year ago when China was busy avoiding orders from the US.