Bloomberg News

U.K. Raises Wheat Import Forecast to 2.19 Million Tons

January 30, 2013

U.K. wheat imports may be 7 percent larger than forecast in November after excess rain last year slashed crop yields while demand for livestock feed and ethanol production remained robust.

Imports may be 2.19 million metric tons in the 2012-13 season that began July 1, up from the previous forecast of 2.046 million tons, according to Department for Environment, Food & Rural Affairs figures distributed today by the Agriculture & Horticulture Development Board. U.K. imports through November were the highest since the 1993-94 marketing year, it said. In the previous season, imports were 908,000 tons. The country may be a net importer of wheat for the first time in 11 years.

U.K. wheat production tumbled 13 percent in the past year to 13.26 million tons, according to Defra, as the country had its second-wettest year on record in 2012. Demand for wheat has climbed as two ethanol plants, Vivergo Fuels and Ensus Ltd., started or resumed production in the second half of 2012, while livestock farmers were forced to feed cattle more grain than normal after soggy conditions reduced grass and hay supplies.

“We’re importing more to account for the crop we’ve had, and demand is staying strong,” Charlotte Garbutt, a senior analyst with the AHDB’s Home-Grown Cereals Authority, said by phone before the report from Kenilworth, England. “There’s no letup in demand really, because we have extra users and more need for feed.”

Feed-wheat futures for May delivery surged to a record 230 pounds ($363) a ton in November. Wheat on the Chicago Board of Trade, the global benchmark, was the best-performing commodity last year as drought curbed grain yields in the U.S., eastern Europe and Russia.

Wheat Balance

The balance of wheat supplies available for export or to be held as free stocks at the end of the season may be 850,000 tons, compared with a balance of 2.643 million tons a year earlier. Wheat exports from July through November were 477,000 tons, compared with 1.23 million tons at the same time in the previous season.

Demand for wheat in animal feed may total 6.334 million tons, compared with the November forecast at 6.33 million tons and the past year’s usage at 6.475 million tons, according to the report. Human and industrial consumption, which includes ethanol demand, may total 7.927 million tons, down from the November forecast at 7.935 million tons while still 16 percent higher than last year.

Corn Imports

U.K. corn, or maize, imports may total 1.185 million tons in the 2012-13 season, surging 19 percent from the previous year and up from the November forecast of 1.08 million tons, according to the report. Barley purchases may be 134,000 tons, less than last season’s imports at 156,000 tons, while up from the November estimate of 130,000 tons.

“Poor weather has resulted in strong demand for compound feed, which is pushing higher the total demand for cereals in animal feed,” Defra said in the report. “Additional compound- feed demand is mainly being met by increased barley and imported maize consumption, as these have been the most competitively priced grains.”

To contact the reporter on this story: Whitney McFerron in London at wmcferron1@bloomberg.net

To contact the editor responsible for this story: Claudia Carpenter at ccarpenter2@bloomberg.net


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