UK wheat exports in June balloon

12.08.2016

Full season UK wheat exports for 2015/16 reached 2.85Mt, the highest since 2008/09, according to HMRC’s recent data release. Export levels of wheat in June totalled 276Kt, the highest volume exported in that month in 19 years. This caused full season exports to rise slightly above the 2.75Mt forecasted by Defra in May but was below the top end of some trade expectations.

Total UK barley exports for 2015/16 came to 1.99Mt (Defra forecast 1.9Mt in May), with June’s exports reaching 105Kt. Full season barley exports were the highest since 1996/97, when total season exports reached 2.1Mt.

The strong export campaign goes hand in hand with the weakening of the sterling, which made UK grains more competitive (read more below). The high exports are therefore likely to reduce the amount of stock available into the next season and may not be as high as first anticipated earlier in the year (read more here). Defra’s full season balance sheet update is due to be released in September, where we will get a better idea of carry out stocks for 2015/16 and subsequently, the opening position for 2016/17.

The weakening of the sterling against a number of different currencies including the euro and the US dollar has helped to improve the UK’s export competitiveness. From the beginning to the end of June, the sterling fell 6% and 7% against the euro and the US dollar respectively. This weakening of the sterling helped increase the progress of the UK’s export campaign. Read more here on the impact of currency on arable markets.

Looking more recently, from Tuesday-Tuesday sterling has fallen 1% against the euro and 2% against the US dollar. As at yesterday sterling stood at £1=€1.17, the lowest since the beginning of June 2013, and £1=$1.30, the lowest since the mid-80s. For the US dollar, the sterling has crept even lower after the big the drop in its relative value on the 24 June 2016.

With this weaker sterling, it’s likely that the strength of the UK’s recent exports could be maintained in 2016/17 – however a lot still depends on harvest output.


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