Spanish importers have begun to ship Ukrainian feed wheat in advance of a European Union auction of permits in the New Year and hefty volumes are expected in January, port and trade sources said in the major grain-buying country.
In January, Brussels is due to call for bids to import some 1.6 million tonnes of low- and medium-quality wheat in the first half of 2012 from origins other than Canada or the United States under the so-called tariff-rate quota (TRQ) scheme.
Spanish dealers tend to use TRQ permits to import feed wheat from Ukraine to fill a structural cereal shortfall in Spain of at least 7 million tonnes a year.
A ship carrying 49,500 tonnes of feed wheat from Ukraine docked in Spain's leading grains port, Tarragona, on Friday.
"It hasn't been customs cleared.
It'll stay in a customs warehouse until it gets clearance in the New Year," a port source said.
The source estimated some 300,000 tonnes of feed wheat would land in Tarragona in January, mostly from Ukraine, but also from its Black Sea neighbours Bulgaria and Romania, with maybe an additional small amount from Russia.
"In January there'll be a fight to see who can get in first and grab space to land merchandise within cost," he said.
Spain's physical wheat market has slowed down in recent weeks as dealers await TRQ imports, for which the EU will extend a current waiver on the usual levy until June 2012.
"All eyes are now on feed wheat due to arrive in ports from January onwards (the famous zero-levy quota), and forward covering revolves around it," a report from the Mercolleida grain exchange said.