Farm officials are poised to revisit UK grains estimates
amid ideas that they have underestimated the country's import needs, which may
turn out more than those of Saudi Arabia.
The UK farming and environment ministry, Defra, will on
Wednesday unveil fresh forecasts for UK cereals supply and demand in 2012-13, a
season marred by a dismal harvest, with wheat yields at a 20-year low, and the
lowest bushel weights on records.
The poor result has provoked ideas that the current Defra
estimate of UK wheat imports of 2.0m tonnes, while a historically high figure,
may be too low, after topping 1m tonnes in the first five months of the
A major European commodities house "it looks as if the
season [import] total will be above 2.5m tonnes", a figure which would top the
2.3m tonnes that Saudi Arabia is expected to import in 2012-13, according to US
Department of Agriculture forecasts.
It would come in just short of the 2.7m-tonne buy-ins
forecast for Iran, although these countries, as structural importers, will not
export as much wheat as the UK over the season.
To judge by historical precedent, which shows that UK imports
in the July-to-November period an average of 44% of total volumes for the whole
marketing year, buy-ins should hit 2.3m-2.4m tonnes over the whole season, said
the HGCA, which assists Defra on its cereals estimates.
"However, we are very much not in a typical year, so it is
hard to know whether this will hold this time," HGCA senior analyst Charlotte Garbutt
"In a year like this, imports may not be linear," she said.
'No demand rationing'
The revisions come against a backdrop of apparently
resilient demand, with wheat use by millers, starch and ethanol producers
rising 9.8% to 2.72m tonnes in July-to-November period.
This figure has been boosted by the Ensus and VIvergo biofuel
plants coming onstream, and the poor flour extraction rates the poor-quality
wheat is offering mills, forcing them to use more.
Production of animal feedstuffs was, at 1.1m tonnes, 4.9%
over the period than a year before.
"Data on usage in the first five months of the season does
not yet show significant demand rationing," the HGCA said.
Wheat vs maize
However, it does reveal a switch in usage in feed from wheat
to barley, which is relatively plentiful, and maize (corn) being imported from
France and the Ukraine, Ms Garbutt said.
The commodities house said: "New crop Ukrainian maize is
already trading into Europe and it could be bought delivered to the UK at about
£165 a tonne, far below current UK wheat prices for autumn delivery.
"What's more, even old crop maize from the Black Sea looks
cheap and we are getting to the stage when some feed manufacturers may take the
step of switching to more maize, in the knowledge that they would benefit, not
just for the rest of this season, but next season as well."