May 19, 2011

UK wheat exports decrease due to dwindling inventories

UK wheat shipments decline in March and hit their lowest in the 2010-11 crop year as there were limited supplies, with exports slow to places within and outside of the EU.

The UK shipped 100,673 tonnes of wheat, less than one-quarter of the peak levels last autumn when buyers clamoured for supplies to replace those lost after a drought hit Black Sea exporters.

However, a slowdown had been widely expected given the drain that imposed on UK supplies has been confirmed by farm ministry data last week.

The country's growers, the EU's third-ranked producers, held 3.5 million tonnes of wheat in March, decreasing by 26% on year with stocks of barley and oats down by more than one-half. Wheat inventories held by merchants, co-operatives and at ports were also marginally lower at 1.05 million tonnes.

March's drop in shipments is reflected in lower exports to other EU nations, which fell below 100,000 tonnes for the first time this crop year.

Shipments to the UK's main export market, Spain, decreased by half to 9,100 tonnes, due to expectations that the southern European country will have a significantly improved domestic grains harvest this year after the occurrence of persistent rains.

Exports to France also eased at more than 20,000 tonnes, remaining well over historic levels. Strong import demand has allowed France, the top-ranked EU wheat producer, to sell even lower quality milling wheat for food. Supplies replaced for livestock feed by UK imports.

UK wheat exports to countries outside the EU, which peaked at nearly 80,000 tonnes in November, stood at 8,325 tonnes, including a landmark maiden shipment of 7,000 tonnes to Turkey.

Many observers have forecast that the UK will face a jump in wheat imports later in the season to beef up supplies although there was little evidence of this in March, when deliveries to the country fell to less than 60,000 tonnes.