Canary Government approves 2024 aid to cover additional fishing and aquaculture costs
The Consejería de Agricultura, Ganadería, Pesca y Soberanía Alimentaria of the Government of the Canary Islands has approved the call for grants to compensate, for the 2024 campaign, the additional costs borne by operators of certain fishing and aquaculture products in the Archipelago. The grants are linked to the Operational Programme for Spain under the European Maritime, Fisheries and Aquaculture Fund (FEMPA), within the POSEICAN-Pesca FEMPA programme. In total, the amount to be paid comes to 7,099,785.99 euros, representing a 15.58% increase, equivalent to 956,931.69 euros, compared with the previous call, due to amendments to the programme’s rules that have increased the budget for ten sub-measures.
Public spending rises as global wheat prices retrace—but won’t ease the food bill
Public spending in the Canary Islands is rising as global wheat prices pull back after profit-taking in Chicago and Paris. However, that move will not reduce the food bill for the Canary archipelago. Disruptions to supply balances in the European market and a surge in military tension in the Black Sea basin impose a heavy burden on the island logistics chain. With the islands depending on imports for more than 90% of its grain, the Archipelago faces a scenario in which the cost of raw materials, sea freight, and strain across supply chains threaten to raise the price of basic consumption and the local livestock herd.
Pressure builds on the La Luz and Santa Cruz docks
The bulk terminals for agro-food products at the ports of La Luz in Las Palmas and Santa Cruz de Tenerife process the flow of cereals needed by the islands’ milling industry and the animal feed sector. The contraction of production estimates in the European Union announced by the European Commission introduces a direct distortive factor into the Archipelago’s import costs. A drop in European soft wheat harvest to 124.4 million tonnes, added to the collapse in maize production to 51.9 million tonnes due to adverse weather in France, forces merchandisers operating from Canary docks to compete in a community market with reduced stocks. The fact that the EU bloc needs to import 24 million tonnes of maize to cover its deficit pushes up demand for Atlantic routes and increases buying positions for island operators.
The Black Sea factor and maritime insurance costs
The geopolitical front in the Black Sea basin is consolidating an unsustainable risk premium on agricultural imports arriving in the Mid-Atlantic. Intensified attacks on port facilities and grain transport vessels in Ukraine and Russia revive fears of a global supply squeeze. While futures contracts for November show pullbacks in UK feed wheat to 196.50 pounds per tonne and in Paris milling wheat, which is key for the Canary market, to 228 euros per tonne, analysts say structural volatility remains intact. For port operations at La Luz—a strategic redistribution hub for cargo heading to West Africa and a direct receiver of bulk carriers from northern Europe and America—uncertainty in the Black Sea translates into a direct increase in maritime insurance premiums and lower availability of tonnage for secondary routes.
French maize shortfall raises risks for local livestock
The collapse of the maize harvest in France, where crop ratings in good or excellent condition fell to 34%—the lowest level recorded since 2011—directly affects the supply specifications demanded by Canary livestock. Feed-mix formulas produced in processing plants in Gran Canaria and Tenerife rely on a steady supply of maize and barley. The downward revision of EU barley production to 51.1 million tonnes reduces the replacement margin between cereals in local livestock rations. Strong purchasing pressure from major northern European ports seeking maize from alternative origins such as Brazil or the United States shifts transport capacity, leaving Canary ports in a position of tariff vulnerability vis-à-vis shipping lines.
Insular storage as a cost buffer
The Relative Strength Index in agricultural derivatives markets, located in the overbought area around the 70-point mark, points to new price upticks if real interruptions occur in maritime flows. Consignees and importers in Las Palmas and Santa Cruz are watching with concern the exchange rate differential and the firmness of the dollar, the reference currency for purchases outside the euro area. The combination of reduced European harvests, greater dependence on transatlantic grain, and the persistent threat to the Ukrainian maritime corridor sets a backdrop of high costs for Canary agri-food logistics during the second half of the year.
The storage capacity of the silos at the islands’ port facilities will act as the first buffer against price swings over the coming weeks. The high level of safety stocks required by Canary geographical isolation means that importing companies must mobilize a larger amount of working capital to finance their purchases of feed wheat and maize. With international futures prices trapped in a high-volatility cycle driven by summer harvesting and the war, the island pantry is exposed to the evolution of global shipping traffic and the liquidity of commodity markets.
The entry El ajuste de los mercados agrícolas golpea la despensa de los puertos canarios was first published on canarymaritime.com.
