UK wheat exports slump, as the origin loses competitiveness

15.02.2017
A recovering pound, and rising domestic prices, sent UK wheat exports crashing down in December, government data showed.
 
UK December wheat exports came in at 93,425 tonnes, the lowest level seen in December since the 2013-14 season.
 
This was down 45% from November, and down 63% year-on-year.
 
Losing competitiveness
 
"It's not a massive surprise when we consider the fact that there was a strong sustained pace through to November," James Bolesworth, at CRM AgriCommodities told Agrimoney.
 
"Then we saw the pound start to recover in November."
 
Surging prices and the stronger pound have left UK dollar-denominated wheat prices expensive against other export origins, "Mr Bolesworth said.
 
"Therefore we needed to see the price correct, trying to gain competitiveness in the export market," he said.
 
UK wheat prices at the start of December stood at £138 a tonne, up 19% year-on-year,
 
Rising demand
 
US government data showed rising use of wheat, in both animal feed and milling.
 
"That was really taking advantage of fairly cheap supplies of UK wheat," Mr Bolesworth said.
 
In December 7.7% more wheat was used to produce animal feed, thanks mostly to a rise in poultry production.
 
And milling use was up as well, thanks to increase biofuel usage.
 
Last summer CropEnergies re-opened its mothballed Ensus plant, one of Europe's largest.
 
Imports increase
 
UK wheat imports were up 12% year-on-year, at 173,466 tonnes.
 
"Imported wheat and corn will keep a cap on UK prices as more is shipped to meet demand," said a major European commodities house.
 
"Cold weather is supportive to animal feed demand and any change in bio-ethanol demand will need to be monitored closely."
 
 

Readers choice: TOP-5 articles of the month by UkrAgroConsult