PRINTABLE VERSION   EMAIL TO A FRIEND   RSS FEEDS 15:34 UK, 12th Dec 2013, by Agrimoney.com
UK wheat imports dip - but not by much

UK wheat imports fell in October, but not by much despite the much improved quality of the domestic harvest, raising concerns over an "addiction" by mills to foreign supplies gained after last year's disaster crop.

The UK, historically the European Union's third-ranked wheat exporter, imported 221,190 tonnes of the grain in October, customs data showed.

That represented a small decline, of some 24,000 tonnes on the September figure, but remained unusually large, far exceeding October exports of 51,312 tonnes.

Indeed, the figure surprised many investors, who had expected a sharp drop-off in buy-ins after a strong summer, which reflected forward purchases by UK flour millers for early 2013-14 needs, amid forecasts of a small UK crop.

'A bit of a taste for foreign wheat'

In fact, while the UK harvest was small - at 12.1m tonnes the lowest since 2001 - it was of above-average quality, raising expectations that millers would return to domestic supplies.

The poor quality of the harvest in 2012, amid the second-wettest year for the UK on record, left them with no option last season but to turn to the likes of Germany for milling wheat.

"Today's data questions whether they have got a bit of a taste for foreign wheat," a UK grains trader told Agrimoney.com.

"Some have been saying it is more consistent, which is what you need if you are trying to produce thousands of cup cakes of identical size."

The data implied that UK wheat "may need to become more competitive in price to work its way back into the grist", the trader said.

November drop-off?

In fact, January wheat futures stood unchanged at 164.55 a tonne in afternoon deals in London.

Another trader at a major merchant said that switch over to UK supplies had only "really started" in October, implying that the drop-off in imports would be witnessed in November data.

"They are working on full English now, the premium [for imports] is too big," the trader said.

October imports may also have been boosted by demand from Scottish distillers.

"For the northern boys, I believe they still have covered from imports through October as well."

Import break-down

Thursday's data showed UK imports of wheat from the hard milling wheat origins of Canada, at 29,793 tonnes, and Germany, at 44,253 tonnes, although purchases from France, a source of soft wheat, did decline strongly, to an 11-month low of 26,078 tonnes.

Unusually, the UK also bought in 69,264 tonnes of wheat in from Bulgaria.

On the feed side, imports of corn also remained firm, at nearly 130,000 tonnes.

And buy-ins of rapeseed, of which the country is also usually a net exporter, soared above 56,000 tonnes in October more than the UK typically imports in a whole season.

Bumper barley exports

However, in barley, the UK did recover historical export strength, with shipments topping 200,000 tonnes in October for the first month in nearly 15 years.

"I think with strong crops elsewhere on the way, in the likes of Australia and Canada, people were keen to get shot of barley while they could," the trader said.

The figure included 93,678 tonnes shipped to Saudi Arabia, where barley is popular as a livestock feed, and which is by far the biggest importer of the grain.

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