November 28, 2012

 

UK wheat imports forecast up over ethanol plant launching

 

 

Citing the opening of the Vivergo ethanol plant and a further setback to farmers from poor weather, with rains requiring livestock to be taken indoor early for winter, the HGCA crop bureau has increased its forecast for UK wheat imports.

 

The HGCA raised its estimate for UK wheat imports in 2012-13 to 2.05 million tonnes, an extra 350,000 tonnes above an initial forecast last month, and the "highest figure in recent records", at least since the 1990s, HGCA senior analyst Charlotte Garbutt said.

 

The estimate reflects the paucity of the 2012 harvest, which produced the worst yield in 20 years and the lowest bushel weight, a key quality measure, on records going back 35 years.

 

"The average UK wheat specific weights are the poorest since 1977 and hence high levels of imports are expected," the HGCA said. However, confirmation of the country turning net importer for the first time in more than a decade was also down to "forecast record levels of usage".

 

Demand has been whetted in part by the coming on-stream of the Vivergo wheat ethanol plant, on track to open in the last quarter of 2012 as scheduled, after missing earlier deadlines. The site will at full tilt, take in some 1.1 million tonnes of wheat a year.

 

However, the HGCA also flagged the impact of a "lower flour extraction rate" in supporting usage by mills, despite their expected reliance on imports for 21% of needs, twice the typical proportion.

 

And the estimate for use by feed mills was lifted by 75,000 tonnes, despite an expected switch by some compounders to barley and corn, now "more competitively priced" than last season.

 

"These factors are countered to some extent by poor forage and grain quality," the HGCA said.

 

Furthermore, "early housing of livestock due to wet weather has accentuated additional feed consumption in the first part of the season". Indeed, the comments come as the UK is reeling from its latest round of rains which have caused many rivers to breach their banks, with 183 flood warnings in force.

 

The rains have also further setback winter sowings for the 2013 harvest, with Origin Enterprises, the owner of the Agrii chain, estimating that 30% remained to be undertaken, at a time of year when plantings would normally have been expected to be completed.

 

A survey by Andersons for the HGCA is understood to show a 12% drop, to 1.76 million hectares, in farmers' expected winter wheat plantings and 9% fall to 385,000 hectares in winter barley, besides a smaller decline, of 3% to 732,000 hectares, in rapeseed. The area vacated is set to be largely taken up by spring barley, for which area is expected to soar 40% to 865,000 hectares.