CAN UK GROWERS KEEP UP CEREAL EXPORTS?
DESPITE a tricky and volatile season, trade figures show UK growers managed to export about 2.5m tonnes of wheat in the first three-quarters of the year. But can the same be achieved next year?
"The season started exceptionally well," explains Philippa Hunt of BCE. "Harvest was quick, and quality consistently high, resulting in 1.71m tonnes being exported in the first two quarters. That was some 40% more than in the corresponding period last year.
At the start of the season, the drought in Spain strengthened our position to ship quality wheat at a competitive price. The bulk of UK exports during those first six months went to Spain and Italy."
However, although demand from southern European states remained, supply from UK farms reduced and price competitivity diminished. That left the UK with an unexpected exportable surplus for the last quarter of 0.6-1m tonnes, outlines Miss Hunt.
Although export taxes were imposed by the EC during the season, Miss Hunt stresses those did not have much affect on exports. The bulk of UK exports, 85%, were to EU countries anyway.
With the new season rapidly approaching Miss Hunt emphasises the importance of quality, consistency of supply and price competitivity.
"While much depends on the buying countrys own harvest and quality of domestic product, UK growers can help themselves by targeting grain for export markets," she explains.
A recent BCE publication details clearly those varieties in demand from the Continent. "It is essential for growers to assess agronomic factors when choosing varieties, but we suggest they dont exclude marketability from their decision making. Typically, the better the grain produced, the more markets become available. Farmers growing solely feed wheat will be limiting their options," adds Miss Hunt.
Price competitiveness is affected by sterling, but can also be directly related to supply. "The importance of offering a reliable supply of grain over the whole marketing year should be stressed," says Miss Hunt.
"Farmers cash flow situations have altered since the introduction of IACS and they are now in a stronger position to delay marketing. But we do recommend that they keep in touch with the trade and just be aware of the effects of delayed selling."
BCE is in its first year as a solely grower-funded organisation and is working harder than ever to promote UK grain abroad, says Miss Hunt. "One of the key areas of work is to develop and maintain strong, direct contact with overseas buyers," she outlines.
"Each year we carry out post harvest missions abroad, advising potential buyers of our crop quality and availability." It is a two-way exercise and buyers have the opportunity to air their views, problems and anticipated requirements.
"Similarly, we will entertain foreign delegates in the UK, showing them farms, storage systems employed and answer any queries on the operation of our supply chain. Unlike the French co-operative system, on-farm storage carries the advantage of being able to segregate varieties and qualities – a positive benefit to the malting markets," comments Miss Hunt.
BCE is also actively developing new outlets. New wheat and barley markets are being explored, with samples of potential varieties for 1997 already being sent to overseas buyers.
"The European Commission consider that they have a responsibility to manage EU grain markets in the best interest of the whole community – producers, processors and consumers alike," explains Jonathan Cowens, general manager of Mardorf Peach.
"If EU grain becomes too competitive on the world market, an unfavourable deficit situation may result. Therefore the commission uses the granting of export licences and the level of these licences to prevent this occurring," outlines Mr Cowens.
"Licences determine whether grain can be exported to third countries, while export taxes/subsidies specify at what level. These measures apply to all EU countries."
Mr Cowens believes that the level of tax on export licences was instrumental in preventing some grain leaving the UK to third countries this year, and feels that if the world prices stay at high levels in the new season, implementation of the tax regime is likely to continue.
Farmers must grow the right grain to match export needs, says BCE.