All-round prospects are looking bright in Britain
Exporting grain from the
UK is vital to keep
domestic markets afloat.
Here, Charles Abel talks to
Barclay Forrest, chairman of
British Cereal Exports, to
find out what the prospects
are beyond the year 2000
CEREAL exports are vital to the future of UK arable farming. Several factors look set to improve prospects in the new millennium.
"Big changes are taking place, particularly in the export of cereals as processed products," says Barclay Forrest, chairman of British Cereal Exports. Those include UK prepared biscuits, cakes, breakfast cereals, flours, beers and whiskies.
Such sales already total the equivalent of 3.4m tonnes. With 10% growth a year, product sales show good potential for the future.
"We have the entrepreneurs here to add value to grain before it is exported. I hope investment in this side of export promotion can be increased after the current review, even if it means asking for more money from the industry."
Indeed greater investment is urgently needed. "We are spending about 3p/t on export promotions. That is a fraction of what the Australians are spending, which can run into £s a tonne."
Co-operating with other EU countries could pay. "There is money in Brussels for third country export promotion, such as into China, if three or more EU countries work together," says Mr Forrest.
"Scottish growers have been paying towards the UK levy for years to get grain out of England. That keeps it out of the Scottish distilling market and creates domestic demand. In the same way it doesnt really matter whether grain goes out of France, Denmark or the UK, provided it leaves the EU. We cant compete with Australia and Canada as separate countries."
Meanwhile, the UKs ability to tailor good quality grain to a specific end use is already finding favour around the world. Instead of exporting on a specification, which may or may not meet the real needs of end-users, UK shippers are increasingly working to deliver bulks fit for a specific purpose.
Developing that approach has been a cornerstone of BCE policy. "It was very evident at last weeks European Bourse (grain market) in London," Mr Forrest says. "Exporters were working very closely with buyers to understand what markets want and to explain what UK grain can do."
International brewers already accept some price movement, because the product they are buying is so well integrated into their process. Now it is time to do the same with wheat. "Italian miller Barilla is already doing this – it is very keen to have just the right grain for the purpose and is pleased with what it is getting."
Varietal developments and the move to more group 1 and 2 varieties help. "If breeders can give us better breadmaking varieties in future that will open up a whole new market opportunity. Italy, for example, is currently taking 3-400,000t of UK biscuit wheat, but needs 2.3m tonnes of breadmaking wheat. The potential is tremendous."
New global trade rules under the next round of World Trade Organisation talks will bring threats and opportunities, he adds. "While it will give US producers greater access to our markets, it will also help our exports."
In China, for example, a 37% tax on malt imports compared with just 3% on barley means malt imports are minimal. WTO tax cuts could open China to malt imports, a market the UK is particularly competitive in.
On assurance, Mr Forrest agrees there is currently little benefit for farmers. But it will come. "For now the opposition is not there, but in two years they will be and we will miss out by default if we can not offer assured grain. EU buyers are already asking for it."
The message is clear, says Mr Forrest. The UK export industry is set to secure a growing share of overseas markets – once currency and weather conditions permit.
• Quality is the key.
• New varieties help.
• Grain sold for purpose, not merely on specification.
• Cereal-based product sales growing faster than grain.
• Assurance can help.
• Need to spend more on promotion.
• Scope for joint EU initiatives?
Tunisia is a key target market for UK grain exports. We report on the findings of a recent mission in next weeks issue of FW.