September 17, 2010
Strategie Grains cuts EU wheat exports forecast
Better prospects for the global wheat crop have lowered hopes for the EU's exports, but high-quality output means France and the UK may still benefit, Strategie Grains said Thursday (Sep 16).
Total wheat exports from the EU are expected to fall to 17.4 million tonnes in the 2010-11 crop year due to competition from major exporters Canada and Australia, the French agricultural forecaster said.
Nonetheless, high-quality milling wheat output in France and the UK means export levels are expected to increase in 2010-11, particularly to North Africa, as the northern-European producers benefit from growing demand.
Wet conditions in Germany and elsewhere during the country's harvest are expected to have reduced the proportion of milling wheat fit for human consumption to 60% of the EU's 2010-11 crop, compared with 66% in 2009-10, the forecaster said.
Exports of French milling wheat have increased sharply as a consequence, as German buyers turn to their neighbours for supplies, while France has imported feed wheat due to Germany's higher availability.
Total soft wheat production in the bloc is expected to fall 1.8% from last year to 127.2 million tonnes, the analyst said, revising down its August prediction by one million tonnes due to lower yields in the UK and Baltic states.
The shift in production means Strategie Grains expects Europe's milling-wheat market to remain in fine equilibrium in the coming year, while feed-wheat supplies are expected to meet demand.
"Whilst the world supply and demand situation remains comfortable, the situation in the EU is now tight," the analyst said. "Estimated ending stock is lower than the minimum stock requirement for June 30."
European wheat prices have surged more than 60% in recent weeks after weather concerns in Europe and severe drought in the Black Sea region lowered predictions for this year's harvest.
Last month Russia, the world's third-largest exporter of wheat, banned exports until at least the end of this year, sending prices surging to two-year highs. Large wheat importers such as Egypt have since begun to look to other exporters, including France, to fill the shortfall.
The EU's total grain production in 2010-11 is forecast to be sharply lower at 274.8 million tonnes, down 5.9% from last year's crop of 292 million tonnes and lower than last month's prediction of an expected 277.5 million tonnes, due to lower wheat, corn and barley production.