Spain overtakes drought-hit UK in grain production

UK grain crops have suffered worst among Europe’s big cereals producers from the dry spring, leaving the country set to fall behind Spain in the region’s grain-growing table.

Coceral analysts slashed to 273.8m tonnes their forecast for the European Union grain crop this year, 10m tonnes below an estimate made in March, when the region’s lack of rain was only beginning to raise concerns.

The downgrade, which took Coceral’s estimate marginally below that of many other observers, reflected significant drops to hopes for all the big three western producers – France, Germany and the UK – where a historically dry springs led to drought being declared in some areas.

Trade implications

However, it was the UK which, in percentage terms, suffered the biggest downgrade, with the estimate for the grain harvest slashed by 13.2% to just under 19m tonnes.

Biggest EU grain producers 2011, and (change on 2010)

1: France, 59.46m tonnes, -8.6%

2: Germany, 43.15m tonnes, -2.7%

3: Poland, 26.96m tonnes, +0.1%

4: Spain, 20.55m tonnes, +12.9%

5: UK, 18.95m tonnes, -6.2%

A harvest that size would leave the UK behind Spain, where persistent rains have raised hopes for the grain crop to 20.6m tonnes – a rise of 1.5m tonnes year on year.

Spain’s harvest prospects look likely to stem the country’s – typically large – reliance on imports to supply its livestock industry.

Indeed, Spain has historically been the largest buyer of UK grain, taking 1.3m tonnes of wheat in 2009-10, and more than 400,000 tonnes of barley.

Winners and losers

The UK downgrade reflected in the main, lower hopes for barley, for which the harvest estimate was cut by 15.0%, or 800,000 tonnes, to 4.5m tonnes.

The country’s wheat crop was pegged at 13.9m tonnes, a reduction of 10.0%, or 1.5m tonnes, on the last estimate.

Coceral, the Brussels based grains industry group, estimated the French wheat harvest, Europe’s biggest, at 32.7m tonnes, down 3.7m tonnes on the March forecast.

However, these downgrades were offset in part by better hopes for some Eastern European countries, such as Bulgaria and Romania, which enjoyed better spring rains, besides an upgrade to the Spanish forecast.

Estimates for Poland, the EU’s third-ranked wheat producer which was also reported to have suffered unusually dry weather, were left largely unchanged.

http://www.agrimoney.com/news/spain-overtakes-drought-hit-uk-in-grain-production–3321.html