Dalgety predicts exportable wheat surplus

By FWi staff

DESPITE the UK wheat yield this harvest being down 30% on last year at 11.866 million tonnes, there is still likely to be an exportable surplus of about 1m tonnes, according to Dalgety Arable.

And a similar surplus of barley is also predicted, says Mark Smith, Dalgetys northern region crop marketing manager.

But, with international cereals markets expected to become increasingly volatile towards the end of the year, predicting export prices is almost impossible, he says.

“In the past few weeks we have seen a strong UK wheat market weaken considerably because of the availability of cheaper grain moving in from abroad,” Mr Smith told journalists at a harvest review this week in Perth.

The situation in Afghanistan was another major factor adding to the uncertainty, said Andrew Barnard, the companys commercial director.

“The Middle East is a major importer. But at the moment, the situation with regard to freight costs and vessel movement in that area is changing daily,” Mr Barnard said.

There were still, however, some positive underlying trends that exporting wheat, in particular, from the UK could be easier than in previous years.

The EU, with virtually no wheat left in intervention stores, has become a competitive supplier on the international market, said Mr Barnard.

“We are now US$3-$4/tonne more competitive than the USA and we really are in a position to compete.”

That was due in part to the unexpected continuing strength of the Dollar.

“If the Dollar continues to firm against the Euro it helps make us even more competitive in the global market,” he said.

World wheat production for the 2001/2 harvest is expected to be down by 8m tonnes to 571m tonnes. “And with world consumption set to rise by 5m tonnes to 599 tonnes, world stocks will fall for the fourth consecutive year,” Mr Barnard said.

“That makes us cautiously optimistic for wheat.”

Global stocks of coarse grains, such as feed barley and maize, are also expected to decline.

Low prices mean that barley is especially attractive to feed compounders this year, with signs that a switch from wheat is already under way, he added.


CLICK HERE to receive FWis FREE new weekly email newsletter, providing an instant link to all the major additions and updates relevant to your arable business.

See more