UK livestock farmers are facing the prospect of higher feed prices due to a ‘quirk’ in the new global tariff schedule.
While a member of the EU, imports of cane and beet molasses from third countries, particularly the USA and India, were not subject to tariffs unless their value fell to a very low level (€79 per mt for cane molasses and €82 per mt for beet molasses).
In practice, this price mechanism had not been triggered for some time, meaning the EU tariff of £2 per mt was not payable.
But the UK chose not to translate the mechanism into its own global tariff schedule after Brexit, so since January 1, a tariff of £0.20 per 100kg (£2 per mt) has been payable on imported molasses.
The Agricultural Industries Confederation (AIC) has warned the decision will have cost impacts all the way down the supply chain, which EU importers and farmers do not face.
Ed Barker, head of policy and external affairs at AIC, said: “It is clear that the disparity in tariff on molasses between the UK and EU was an oversight in the setting of the UK’s own global tariff.
“Defra have been very understanding of this situation, but it now rests with the Department for International Trade, who need to act quickly to change it to ensure molasses tariffs are set at levels which are at least the same as those for EU importers.
“Failure to do so will mean higher costs for molasses being brought into the UK, impacting on livestock sectors which use molasses, and it will also impact on competitiveness against EU producers importing molasses without a tariff.”
The UK feed market for molasses is worth approximately 400,000 mts a year, making the minimum tariff £800,000, but AIC has warned costs will be higher due to the added trade facilitation expenses associated with paying tariffs importers have historically not paid.