Netherlands leads rise in purchases of UK wheat

UK wheat exports picked up in June to their highest for five months, lifted by late-season purchases by other European states, and implying a drop to historical lows in the supplies left in the country heading into harvest.

The UK shipped 120,390 tonnes of wheat in June, the last month of the 2010-11 marketing year, a 69% rise on the May figure.

The increase took total UK exports for the season to 2.65m tonnes, a rise of 9.0% year on year and some 200,000 tonnes above the official forecast released in June.

The official export figure was itself viewed by officials as sufficient to leave the UK with its tightest stocks "in the modern era".

Black Sea gap

The Netherlands was the most popular destination for UK wheat in June – and indeed for the whole season, taking shipments of more than 663,000 tonnes overall, more than double the amount of the year before.

European Union buyers of UK wheat and (year-on-year change)

1: Netherlands, 663,169 tonnes, (+156%)

2: Spain, 583,574 tonnes, (-54%)

3: Belgium-Luxembourg, 284,540 tonnes, (+181%)

4: France, 227,039 tonnes, (+497%)

5: Germany, 189,587 tonnes, (+628%)

Grain often passes through the Netherlands on its way to other European Union countries – many of which were forced to seek new supplies by the market shake-up which followed curbs on shipments from the Black Sea exporters, following drought last year.

Even France, the EU’s top exporter, took in hefty quantities of UK wheat, as its own inventories were depleted to meet demand largely from North African importers.

Algeria and Tunisia appeared on the list of buyers of UK wheat too, unlike in 2009-10 – as did, further afield, Thailand and Vietnam.

Domestic pressures

The rise in shipments contrasts with earlier expectations of a declining trend of wheat exports, with grain ethanol plants forecast to mop up an increasing proportion of the crop and, potentially, deny the country an exportable surplus.

However, the Ensus plant in the north of England was mothballed late in 2010-11, with the opening of the nearby Vivergo site, backed by the likes of Associated British Foods, BP and DuPont, delayed until spring next year.

UK wheat exports outpaced imports by 1.65m tonnes during the season, up from 1.19m tonnes the year before.

And many traders believe the UK will have a significant export surplus in the newly-started 2011-12 crop year too, given assessments of a good quality crop so far, with yields better than had been expected during the spring drought.

Rapeseed in demand

In barley, UK exports fell by one-quarter to 772,000 tonnes in 2010-11, with decline in particular in shipments to Portugal and Spain.

However, rapeseed shipments quadrupled to 433,000 tonnes, with nearly all going to continental Europe, where the oilseed is in demand to refine into biodiesel, in which EU countries are introducing mandated levels.

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