500,000t UK barley heading for stores?
500,000t UK barley heading for stores?
By Tim Relf
UP TO 500,000t of UK barley could be heading into intervention stores this season, compared with only 15,000t last season.
That was the prediction of economist Steve Knight at the HGCAs Marketing into the Millennium conference on Wed-nesday (Oct 1).
A 7.8m tonne crop, together with a big carry-over from last year, had generated the biggest supply since 1991/92, delegates in London heard.
And while domestic use could rise slightly, it still left an export availability of 2.6m tonnes, which was 500,000t more than last year.
The crucial factor in determining intervention volumes, said Mr Knight, was the export trade. And this, in turn, depended on sterlings strength and EU policy.
With November support prices about £78/t, intervention was not too far away from the current market price. "It wouldnt take too much of a slide for it to become competitive."
But Continental Grain trader William Fox predicted that 300,000t would be about the maximum likely to go into intervention. Most of this would come from Scotland and the Borders.
"The single most important factor governing exports is the EUs policy. It will be cheaper for Brussels to allow us to export the barley, rather than seeing it go into intervention and then having to finance export restitutions to get rid of feed wheat."
As for wheat export prospects, UK competitiveness against the French remained vital, continued Mr Knight. And while the £ is expected to stay fairly strong until the end of the year, it could weaken in 1998.
Quality concerns were widespread this year, he added, with about one-quarter of the wheat crop having specific weights below 72kg/hl. "But, remember in 1992, the figure was over 40%," he said.