Linked In
News In
Linked In

You are viewing 1 of your 2 complimentary articles.

Register now to receive full access.

Already registered?

Login | Join us now

UK corn imports soar again. But is trend to end?

Twitter Linkedin

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 tonnes.

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.

'Competitively priced supplies'

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.

Ukraine factor

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."

Discount narrows

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.


Twitter Linkedin
Related Stories

'Moribund atmosphere' in EU wheat market to extend into 2018-19

... says Strategie Grains, foreseeing another decent harvest, yet little chance of an export revival against tough Russian competition

Can cotton prices extend their rally?

History suggests futures will not stay long in the 70s cents a pound. So which way will they trend?

Morning markets: Hard wheat regains premium over soft, amid US dryness worries

Kansas City wheat outperforms, as Plains precipitation worries extend to a dearth of snow cover. But Kuala Lumpur palm oil hits a 16-month low

Evening markets: Ags gain, as funds begin to get that year-end festive mood

Ag prices recover, helped by the likes of more positive comment on US export competitiveness, and some more negative talk on Argentine rains
Home | About | RSS | Commodities | Companies | Markets | Legal disclaimer | Privacy policy | Contact

Our Brands: Comtell | Feedinfo | FGInsight

© 2017 and Agrimoney are trademarks of Agrimoney Ltd
Agrimoney is part of the Briefing Media group
Agrimoney Ltd is registered in England & Wales. Registered number: 09239069