July 4, 2011

 

Spain overtakes drought-hit UK in grain production

 

 

UK grain crops have suffered worst among Europe's big cereals producers from the dry spring, leaving the country set to fall behind Spain in the region's grain-growing table.

 

Analysts slashed to 273.8 million tonnes their forecast for the EU grain crop this year, 10 million tonnes below an estimate made in March, when the region's lack of rain was only beginning to raise concerns.

 

The downgrade, which took Coceral's estimate marginally below that of many other observers, reflected significant drops to hopes for all the big three western producers: France, Germany, and the UK, where a historically dry springs led to drought being declared in some areas.

 

However, it was the UK which, in percentage terms, suffered the biggest downgrade, with the estimate for the grain harvest slashed by 13.2% to just under 19 million tonnes.

 

A harvest that size would leave the UK behind Spain, where persistent rains have raised hopes for the grain crop to 20.6m tonnes ?a rise of 1.5m tonnes year on year.

 

Spain's harvest prospects look likely to stem the country's - typically large - reliance on imports to supply its livestock industry.

 

Indeed, Spain has historically been the largest buyer of UK grain, taking 1.3 million tonnes of wheat in 2009-10, and more than 400,000 tonnes of barley.

 

The UK downgrade reflected in the main, lowers hopes for barley, for which the harvest estimate was cut by 15.0%, or 800,000 tonnes, to 4.5 million tonnes.

 

The country's wheat crop was pegged at 13.9 million tonnes, a reduction of 10%, or 1.5 million tonnes, on the last estimate.

 

Analysts estimated the French wheat harvest, Europe's biggest, at 32.7 million tonnes, down 3.7 million tonnes on the March forecast.

 

However, these downgrades were offset in part by better hopes for some Eastern European countries, such as Bulgaria and Romania, which enjoyed better spring rains, besides an upgrade to the Spanish forecast.

 

Estimates for Poland, the EU's third-ranked wheat producer which was also reported to have suffered unusually dry weather, were left largely unchanged.