Black Sea scrum boosts UK wheat

UK wheat exporters might pick up some extra business following last week’s scramble by Black Sea shippers for reduced levy import licenses.

Just under 600,000t of imports for the last quarter of 2005 were available under the tariff rate quota scheme – set up to limit the tonnage of cheap third country shipments coming into the EU.

Brussels allocated licenses pro-rata – 1t for each 333t applied for.

Some shippers would have to seek grain from other areas to honour contracts, said James Marshall of Centaur Grain.

“We’re not talking huge tonnages, and it won’t necessarily cause the market to roar up, but it should help.”

Domestic demand and weaker sterling were behind recent price rises, he added. Ex-farm November values stood at £63-£65/t, up £5-£6/t since harvest.

James Maw of Glencore was less optimistic, saying the TRQ bidding process would still allow 600,000t into the EU, however it was filled.

He believed there was little price headroom as long as the EU had big intervention stocks and free market tonnages to sell.

New crop continues to improve, with £70/t ex-farm achievable each side of New Year 2006/07, up about £2/t on the week.

“I think the outlook is more optimistic,” said Mr Marshall. “But, with rising fuel and fertiliser prices, farmers need these better prices just to stand still.”