WORLD TRADE
ORGANIZATIONG/STR/N/4/LVA
G/STR/N/5/LVA
8 July 1999
(99-2826)
Working Party on
State Trading EnterprisesOriginal:  English
STATE TRADING
New and Full and Updating Notifications Pursuant to Article XVII:4(a)
of the GATT 1994 and Paragraph 1 of the Understanding
on the Interpretation of Article XVII
LATVIA
The following communication, dated 2 July 1999, has been received from the Permanent
Mission of Latvia.
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I. ENUMERATION OF STATE TRADING ENTERPRISES
The Government of  Latvia wishes to notify the functioning of the Cereal Trade Agency,
having some features of a state trading entity within the meaning of GATT Article XVII. The Cereal
Trade Agency trades in the grain products under HS groups 1001, 1002, 1003, 1004, 1008, 1101,
1102, 1103, 1104, 2302, 2304 and 230990.
II. REASON AND PURPOSE FOR INTRODUCING AND MAINTAINING THE STATE
TRADING ENTERPRISE
The Cereal Trade Agency, created in 1993, is responsible for grain intervention in the
domestic market in order to ensure more stable supply/demand relationship and consequently bring
about greater stability and predictability of prices . In discharging its functions the Cereal Trade
Agency conducts purchases, sales and stock management.
The principal activities of Cereal Trade Agency are supposed to be financed through the
annual Budget approved by the Parliament.  Such funding in principle is not available to other
operators in the market.  Therefore it appears to represent a special privilege within the meaning of
GATT Article XVII and may thus qualify under the disciplines provided for in that Article.  Howeversince the establishment of Cereal Trade Agency, Budget financing has not been granted .  The Cereal
Trade Agency has at its disposal monetary recourses of its own resulting from the release of grain
purchased for the commodity stock in previous years
In addition to its principal functions indicated above, the Cereal Trade Agency conducts grain
market research and analysis and assists the Government in elaboration of policy guidelines for
trading in grain.
Legal provisions – 1.  Articles 4 and 5 of the La w “On Latvia Grain Market and State Grain Reserve”.G/STR/N/4/LVA
G/STR/N/5/LVA
Page 2
2. Regulations of the Cabinet of Ministers No. 356 of 21 October 1997 “Statutes
of non-profit organization state stock company “Cereal Trade Agency””.
III. DESCRIPTION OF THE STATE TRADING ENTERPRISE
There are several forms of the Cereal Trade Agency operations:
1. The Cereal Trade Agency acts to prevent domestic prices from falling below the minimum
reference price.  In this regard, the Cereal Trade Agency conducts purchases and sales of cereals using
network of specially authorised state-owned and pr ivate agents. During periods of increased domestic
supply, when the domestic price falls below the intervention trigger price, the Cereal Trade Agency
makes purchases of cereals for commodity stocks.  Such stocks are subsequently released into thegrain market in periods of upward price movement.
2. The Cereal Trade Agency annually draws up the Grains Production and Consumption
Balance-Sheet and submits its proposals on grain vo lumes to be imported by the Cereal State Agency
to the Government.
The Cereal Trade Agency conducts foreign trade operations both directly and using network
of specially authorized state-owned and private agents.  Foreign trade operations are conducted solely
in accordance with commercial considerations, including price, quality, availability, marketability,
transportation and other conditions of purchase or sale.  Other traders remain free to import and exportcereals on competitive terms and under normal market conditions and their rights in this respect are
not affected by activities of the Cereal Trade Agency. State has not granted any monopolistic or
exclusive rights to the Cereal Trade Agency for trading any of these products.  This applies also to the
access to tariff rate quotas which are open to all registered companies.
The Cereal Trade Agency  currently does not deal with long term contracts.G/STR/N/4/LVA
G/STR/N/5/LVA
Page 3IV. STATISTICAL INFORMATION ON GRAINS:  VOLUME S PRODUCED, EXPORTED, AND IMPORTED IN 1996-1998
Imports Exports
Imports by the
enterpriseOther trade Exports by the
enterpriseOther tradeNational
production
(t) Year
Quantity
(t)Value (LVL,
thousands)Quantity
(t)Value (LVL,
thousands)Quantity
(t)Value (LVL,
thousands)Quantity
(t)Value (LVL,
thousands)Quantity
(t)
1996* 56,589 6,719 113,076 11,050 12 3 470,400
1997** 5,923 521 38,443 3,647 9,319 706 4,202 371 528,100
1998 9,956 679 2,545 199 2,425 200 490,100
*    -   State Cereal Bureau**  -   Until 30.10.97/State Cereal Bureau
Taking into account that the State Cereal Agency trades only in wheat and rye, the other Latvian trade and production are given  only for these two crops.
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