UK wheat exports are too low to make significant inroads into the country’s heavy stocks, while imports remain stubbornly high, the UK agricultural bureau AHDB said.
But Jack Watts, lead analyst at the AHDB told a conference in London that this year’s harvest in the UK, the EU’s third largest wheat grower is unlikely to match the previous season’s levels, forecasting production as low as 14.5m tonnes.
UK wheat exports this year have lagged the pace needed to shift the national 3m tonne surplus, Mr Watts said.
The UK shipped just over 1.5m tonnes shipped between the start of the season and March, well behind the 2m tonnes of export that would be needed to make big inroads into stocks.
And there is little prospect of the shortfall being made up in the remaining two months of the marketing year.
At the same time, UK wheat imports remain stubbornly high, at over 1m tonnes.
The high imports for milling use, despite the available stocks, is a legacy of the poor 2012 crop, which forced end users to import wheat to meet their requirements, while the feed industry switched to importing corn to substitute for feed wheat wheat.
Imports of both these crops are still double the volumes in 2011-12, despite the subsequent recovery in UK wheat production.
Export prospects under pressure
And exports prospects are squeezed, as global wheat stocks are high after two very good years across the world’s grain growing areas.
A 20m tonne deficit would be needed in the current year just to bring the world wheat market to balance, Mr Watts said.
But this would need a major weather event, along the lines of the 2012 US drought, if production and stock levels are to reduce to the extent needed to pressurise prices upwards.
Yields to drop
Still, Mr Watts said the potential of the 2016 harvest to match the record yields of the last two seasons is receding.
He said the late cold spring in Northern Europe means that cereal yields across the region are unlikely to match those of 2014 and 2015.
He predicted a smaller UK wheat crop – perhaps 14.5-15 million tonnes – compared to the usual 16m tonnes
Looking further ahead, Mr Watts predicted the UK wheat area will stabilise at around 1.8 million hectares.
And Mr Watts urged farmers to select higher quality wheat varieties, rather than the feed wheat which currently predominates, in order to supply a wider range of market outlets.
(Source – http://www.agrimoney.com/news/uk-imports-failing-to-make-inroads-into-hefty-wheat-stocks–9543.html)