November 5, 2010

 

EU sees more corn imports amid poor crop

Bad weather means lesser corn yield for EU this year which will raise its import requirements, traders and analysts said Thursday (Nov 4).

 

"We are facing a lower maize crop following low crops of other feed grains earlier in the summer. There are already signs of increased maize import demand," one trader said.

 

French grains analyst Strategie Grains forecasts the EU's 2010 corn crop will fall to 55.6 million tonnes from 57.1 million tonnes last year.

 

The International Grains Council also cut 10 million tonnes from its global crop last week.

 

"The outlook for maize output in France and Germany is not good but in the eastern EU the picture looks better. Overall we are facing tighter maize supplies," one trader said.

 

Corn is an important animal feed, especially for poultry farmers.

 

In France, the top EU corn producer, the crop is approaching its end after a difficult start due to bad weather and a lower harvest is forecast but the picture is still unclear.

 

About 80% of France's harvest is finished but official and analysts' estimates of crop size range between 13 and 13.7 million tonnes against 15.2 million tonnes last year.

 

French grains analyst Agritel warns that drought this summer means yields will vary greatly around the country.

 

In second-largest producer Hungary, the government forecasts the crop will be unchanged on the year at 7.4 million tonnes with about 49% harvested. But trade forecasts are less optimistic, with a crop of about 6.8 million tonnes expected.

 

In third-largest producer Germany, the government forecasts this year's harvest will fall to 4.1 million tonnes from 4.5 million tonnes last year.

 

"Harvesting has been repeatedly delayed by rain and the outlook over the weekend is not good. Unless we see a prolonged period of dry weather we could see some German crop forecasts being revised downwards," one German trader said.

 

In major importer Spain, field work has just begun after delays due to heavy rain in the northern Castilla-Leon grainbelt region, which is expected to produce about 30% of a corn harvest officially forecast at 3.24 million tonnes, down about 7% on the year.

 

The lower crop means more corn imports are expected in coming months, traders said.

 

"We are already seeing a noticeable rise in import demand, with the EU awarding import licences for a hefty 140,000 tonnes of maize alone between October 20-26. More import demand is likely from Spain, Portugal, the Netherlands and the UK," one trader said.

 

In October, Spain unloaded its first bulk US corn imports in around 12 years following a shipment of 57,000 tonnes of US corn to Germany in September.

 

Spain has to import 4-5.5 million tonnes of corn a year. France was the most popular origin for the year up to August, although Spanish traders say they have recently bought from Brazil and Ukraine.

 

But grain export restrictions by Ukraine and Russia following droughts this summer may raise export shipments from eastern EU countries via the Black Sea to Middle East buyers, traders added.