16 January 1998

Wheat stocks could rocket

CONCERNS are growing that wheat stocks could shoot up unless a more aggressive export policy is adopted by the EU Commission.

EU grain intervention levels, down to just over 2m tonnes at the start of this season, could reach 9m tonnes, says the HGCA. Of the 5m tonnes currently in store, more than 80% is in Germany (mostly barley and rye), where high transport costs make this a competitive option.

Latest estimates put the UKs wheat export availability at 3.4m tonnes, of which 2m tonnes is left to shift in the second half of the season. This doesnt bode well for feed wheat prices – which, according to the HGCA, spent the first half of the season down more than £20/t on 1996, chiefly due to the strong £.

Dalgetys Trevor Harriman says recent weakening of sterling hasnt brought any upturn in prices. "Its just brought the UK more into line with its competitors.

"More than 300,000t a month will have to be shipped through to the end of the campaign in June if this wheat is to be disposed of. It means relying on Brussels for the appropriate restitutions.

"I dont think this market is at the bottom yet."