Spanish traders said a decision to buy grain from eastern Europe meant organising complicated delivery by rail and truck to ports, possible transport delays, bureaucratic hurdles and higher costs.

"Importers lose the benefits of economies of scale when they have to bring in small cargoes of east European supplies, instead of large loads from the US," one trader said.

Spanish importers will not touch reduced-levy US maize imports because cargoes could include unapproved genetically modified (GMO) strains. Any US cargo would not clear customs as GMO and non-GMO varieties are not usually segregated.

As little Argentine old crop was left, importers were forced to look to eastern Europe for good-quality crop that, after tariff cuts, cost less than maize from the main supplier France.

The recent beneficiaryof the US absence from the Iberian maize market has been Hungary, which sold small volumes of reduced-levy maize to Spain at the last two weekly EU tenders.

At Thursday's tender the EU granted licences for Spain to import 10,000 tonnes of Hungarian maize at tariff cuts of up to 74.86 euros per tonne and for Portugal to import 15,000 tonnes from the same origin at tariff cuts of up to 69.85 euros.

The previous week, the EU granted tariff cuts of up to 74.87 euros per tonne for 7,350 tonnes of Hungarian maize for Spain.

Traders said it cost $14-21 per tonne more to import maize from eastern Europe than it would to ship from the United States.

Some traders believed the EU could award no more than two thirds of the current 600,000 tonne tranche of preferential maize imports for Spain by the time it expires on February 25 due to the difficulties of buying eastern European supplies.

They said the EU's recent decisions to grant low volumes of Hungarian maize imports for Spain and Portugal could supportdomestic maize prices in the near term.

Domestic maize prices have remained buoyant in recent weeks. The costliest maize in Spain, which comes from the western region of Extremadura, has been inching higher as stocks declined after the harvest ended there several weeks ago.

Extremadura maize ex-store stood at 24,900-25,200 pesetas per tonne last week, against 24,500-25,000 the previous week.

The cheapest Spanish maize was from Castilla Leon, between the North and centre of the country, where the harvest was some 70 per cent complete, traders said.

Castilla Leon maize ex-store traded at 22,600-23,000 pesetas per tonne last week, against 22,600-22,700 the previous week.

The United States was concerned over lost maize sales to Iberia, which accounted for some five per cent of its maize exports.

The US exports around $1.4 billion of agricultural produce to Spain annually. Agriculture is a key area of trade between the two countries.

Imported feed wheat prices fell last week in Spain andPortugal,although they recovered slightly before Thursday's EU grain tenders due to short covering, traders said. Domestic feed wheat was flat.

Traders said big supplies of French and British feed wheat would weigh on prices in the near term, although the EU's decision on Thursday to approve the export of 219,500 tonnes of soft wheat from the domestic free market would help sentiment.

Imported feed wheat delivered Tarragona Jan-May stood at 20,800 pesetas per tonne last week, against 21,000-21,100 the previous week.

Autumn-winter wheat planting in Andalusia in southern Spain had been delayed by drought, but recent rains in Castilla Leon had helped sowing there, traders said.

In Portugal, Lisbon grain traders said winter wheat sowing was progressing on schedule in the main growing areas of the Alentejo in the South, although they noted brief delays in December due to a lack of rain.