April 25, 2008

 

UK wheat export surplus may double to 3.1 million tonnes for 2008-09 

 

 

The UK could have a wheat export surplus of 3.1 million tonnes in the 2008-09 (July-June) marketing year, up 87 percent from the 1.65-million-ton surplus from last season, estimates released Thursday (April 24, 2008) by UK merchant Grainfarmers show.

 

The surplus is seen to help ease the current tight global wheat situation caused by back-to-back seasons of global production problems.

 

UK farmers raced to plant more wheat in the fall, when prices soared to record highs. These efforts were further aided by the European Union's removal of its mandatory 10 percent set-aside land programme.

 

Grain farmers forecast the 2008-09 UK wheat crop to come in at 16.4 million tonnes, up 23.3 percent from 13.3 million tonnes last season.

 

Higher wheat production is also expected throughout the world, with Grainfarmers estimating the 2008-09 output at record high level of 645 million-655 million tonnes, up sharply from the 2007-08 adverse-weather hit crop of 604 million tonnes.

 

Farmers have also increased plantings of higher-yielding, lower-quality wheat to about 50 percent, up from about 33 percent-36 percent in recent years. The push comes at the expense of higher quality, milling wheat.

 

This means more of the 2008-09 UK wheat crop will need to compete in the feed market with imported corn from South America, especially into regions such as Spain. New crop UK wheat into Spain is already priced at parity with imported corn, traders from Grainfarmers said.

 

Worrell said UK wheat exports were aided this year with sales of some lower milling quality wheat to northern Africa, which is not a traditional market for the UK

 

At the same time the UK's milling industry may need to import more milling wheat to achieve the quality needed to reach baking standards, which raise the amount of feed wheat that needs to be exported.

 

The UK is also expected to see lesser wheat used for animal feeding, as UK pig numbers are expected to decline due to sustained losses by hog farmers.