UK corn imports, having taken at least 22 years to top
300,000 tonnes in a single month, passed this level again the next month, amid
a surge in the grain's popularity as a feed ingredient – which may be
threatened by the Ukraine crisis.
The UK imported 311,714 tonnes of corn in January, up 80%
year on year, and a figure second on record going back to 1992-93 only to
December's total of 388,939 tonnes, customs data showed.
The buy-ins took the total volume of imports in the first
seven months of 2013-14 to 1.44m tonnes, up 54% year on year, and by far the
highest for the period in the available records.
The data came amid monthly statistics showing that for wheat
the UK, historically a net exporter, imported more of the grain than it shipped
out for a 20th successive month in January.
Corn vs wheat
The extent of corn reflects growing demand for the grain as
a livestock feed in the UK, with some rumours that it is being used
increasingly as an alternative to wheat by the Ensus ethanol plant too.
Official feed production data show major feed companies
using nearly twice as much corn in December, the latest month for wheat data
are available, as a year before.
The HGCA crop bureau forecasts the UK, which grows negligible
amounts of corn itself for grain, using 1.76m tonnes of the crop this season,
up 13% year on year, and 68% higher than the long-term average of 961,000
The switch to corn from wheat, for which US consumption is
seen falling by 6% this season, has been driven by price differentials, with corn
calculating cheaper as a feed grain to many UK destinations.
Indeed, this has been a dynamic elsewhere too in the European Union,
given the contrast between soft corn prices, weighed by strong US and Ukraine
harvest, and wheat values backed by the record pace of export demand.
"With firm international demand supporting prices for EU
wheat, there has been an increase in demand from the EU animal feed sector for
competitively priced supplies of third-country corn," the HGCA said.
The US Department of Agriculture last week raised by 500,000
tonnes, to 11.0m tonnes, its forecast for EU corn buy-ins this season – a figure
which itself assumes a rapid slowdown in volumes from the 250,000 tonnes a week
or so bought in so far in 2013-14.
However, with the European Union buying in much of its
external corn supplies from Ukraine, the Crimea crisis could yet provoke a dip
in imports and a switch back to wheat.
"As most consumers require non-genetically modified (GM)
grain, they may struggle without the Ukraine," traders at a major European
commodities house said.
Although there is no sign yet of Ukraine shipments being
disrupted, there have been widespread reports of buyers preferring to place
fresh orders elsewhere.
"Without the Ukraine, one of the other available sources for
corn in quantity is Canada, and we have seen some Canadian cargoes delivered to
Northern Ireland already this season," the traders said.
"However, Canadian corn is GM and although the varieties are
EU approved, UK consumers still fight shy of it. Therefore more feed demand may
be switched to wheat."
Markets are already encouraging the switch back to wheat.
"With tensions over Ukraine export flow disruption easing,
we are seeing the Matif wheat-corn spread narrow, having widened to over E25.00
a tonne," Jaime Nolan Miralles at broker INTL FCStone said.