Win for UK feed industry trade group on molasses tariffs

07-May-2021 - Last updated on 07-May-2021 at 14:47 GMT

UK livestock farmers and suppliers who use molasses in feed will benefit from a UK government decision to remove the tariff on imports of such products.

Feed industry representative body in the UK, the Agricultural Industries Confederation (AIC), said it had lobbied hard for the tariff to be dropped.

It took four months of work; the trade group actively engaged with the UK Department for Environment, Food and Rural Affairs (Defra) and the UK Department of International Trade (DIT) to get the duties removed. The AIC and several of its members provided submission of evidence to demonstrate the need for elimination of those duties.

The UK government confirmed, in the past week, that the tariffs on imported molasses into the UK will now be dropped from May 20, 2021.

“This means that UK importers and customers of molasses-based products will not be placed at a competitive disadvantage.

“Over the past months, the AIC has met with MPs, ministers and civil servants to have this corrected, and has worked with devolved administrations and farming groups to lobby for this change. It is welcome that the government has listened and corrected this tariff,” commented the AIC.

The new UK molasses tariff will not have a trigger price mechanism, such as the EU’s, and it will instead be a straight 0% tariff on all imports.

Background

When the UK government set up its own tariff policy on January 1, 2021, it applied a different tariff to the EU on imports of molasses from third countries. As a result, molasses imported to the UK since January faced a higher tariff than those exported to the EU, said the AIC. “This meant higher costs for the UK farm supply chain in this regard.”

Molasses are used in most feeds as a nutritional energy source, palatability enhancer and feed formulation binding ingredient.

Implications of EU-US dispute on molasses prices

The Irish livestock sector, heavily reliant on US molasses, reported challenges a few months back as a result of punitive tariffs placed on imports of molasses from Florida, imposed as part of a long running dispute between the EU and the US over aircraft subsidies.

Fortunately, in March this year, there was some temporary relief for end users of molasses from the US, with the EU and its US counterparts moving to suspend the tariffs for four months and agreeing that a long-term solution to the row would need to address Chinese competition.