Brussels to help shift UK wheat surplus?

By Robert Harris

CEREAL exports from the EU remain high on Brussels agenda – good news for farmers and traders looking to shift the UKs big wheat surplus.

“Much of this business could come from the UK,” says Dalgetys Gary Hutchings. “At an $8/t discount to the French, we are certainly cheap enough.” UK exports could even stand a slight price rise without losing their edge, he adds.

Brussels granted over 300,000 tonnes of free market wheat licenses last week, subsided at nearly Ecu34 (£24.50)/t.

A bid for 600,000 tonnes of wheat flour also succeeded, taking last weeks total wheat export licenses to almost 1m tonnes. That makes 4.8 million tonnes for the season so far, 25% up on the same period last year.

A weakening Pound saw wheat values rise by up to £3/t last week, lifting ex-farm prices above £70/t in many areas. However, that flushed out more sellers, and increased availability tempered the rally, traders report. But whispers that the Chinese have bought 200,000 tonnes of EU wheat will add further support if confirmed.

Barley values rose on the back of wheat and shipping demand to meet the October export programme. The Chinese also helped by buying 700,000 tonnes of EU barley. By Tuesday, ex-farm prices averaged £71/t ex farm in many areas, matching wheat.

The crop is also benefiting from export attention, with 410,000 tonnes worth of export licenses granted last week. Total licenses including malt are now 2.75 million tonnes, more than five times as much as this time last year.