UK wheat exports started the marketing year at their slowest
pace in nearly 20 years, while imports soared, as the poor quantity, and
quality, of the crop turned the typical trade dynamic on its head.
The UK - the European Union's third ranked wheat producer,
and typically a sizeable net exporter of the grain – shipped out just 26,804
tonnes of the grain in August, making it the weakest month for shipments in a
Total exports for July and August, the first two months of
2012-13, reached 64,980 tonnes, the lowest for the period since 1993-94.
Meanwhile, imports for the two months topped 340,000 tonnes,
more than double those at the same period last season.
Cost of the wet
The switch to being a net importer - a status which the HGCA crop
bureau earlier this week forecast would mark the full 2012-13 crop year -
reflects a UK crop hurt by the wettest summer in a century, ahead of which yields
had appeared promising despite early season drought.
HGCA crop analyst Jack Watts told the bureau's annual
outlook conference in London on Tuesday that, with crops appearing in May set
for a bumper result, the final yield at its lowest in 20 years meant "the poor
summer cost the UK 4m tonnes of wheat production".
It also hurt quality, with just 3% of British Group 1 wheat,
the top milling grade, meeting full specifications, compared with 40% last year,
and 10% of Group 3 biscuit grain, down from 73%.
Mills were working round the clock to process kernels which,
thanks to the dire quality, were offering poor rates of flour, while feed
merchants were adding energy supplements.
Ensus, Europe's biggest wheat ethanol plant, based in the
north of England, has lowered to 60 kilogrammes per hectolitre its hurdle for the
specific weight of grain – a measure of shrivelled kernels – to ensure sufficient
supplies to meet requirements of about 100,000 tonnes a month.
Imports from Germany
However, imports offered users another route to supplies,
with German A milling wheat being used as a proxy for domestic supplies.
Indeed, the price of wheat imports from Germany, currently
roughly £240 a tonne, had put a ceiling on UK wheat premiums, Mr Watts said.
Merchants were also importing higher quality foreign grain to
mix with domestic supplies and bring them up to the mark, while some discounted
UK wheat was being exported for blending abroad.