The UK is expected to remain a net importer of wheat for a second year running, as last year’s torrential rain and this year’s long winter continue to take a toll on much of the country’s grain crops.
A new survey by the Home Grown Cereals Authority suggests British wheat growers will harvest an area 20% smaller this season than in 2012/13, down to just 1.61 million hectares.
All growing regions in the UK are set to suffer, with area reductions ranging from 12% in Eastern England to about 26% in the South West. In Scotland, the HGCA estimates wheat harvest area will fall to just 86,000 hectares - the smallest since 2003 , down 14% on 2012 and down 25% on 2011.
“The low GB wheat area for this year makes it very likely the UK will remain a net importer of wheat in 2013/14 as it was in 2012/13,” the HGCA warned.
Electricity prices remain at the top of our commodities tracker, driven by recent increases in gas prices. At £52.91/MWh, electricity is 25.3% more expensive than this time last year and up 9.6% month-on-month.
Kenyan tea also continues to be among our key risers - even though prices are lower than last year - with Arabica coffee also recording strong month-on-month gains against a year-on-year downward price trend.
Meanwhile, cocoa powder prices continue to fall, with prices now 33.2% cheaper than this time last year and down 3.9% compared with last month. Cocoa powder prices are falling as the market continues to return to more normal levels following the peaks seen in 2011.
Analyst Jack Watts added that although the fall in wheat harvest area was “extreme”, it would not be a surprise to buyers.
“This is unlikely to come as a huge shock to the industry or the market, which has preparing for such a scenario for some time,” he said. “Higher levels of carry-over stock from the previous season may also partly offset the low level of production.”
Overall, British cereals and oilseeds growers will harvest a total area 4% smaller this year than in 2012, according to the HGCA. For barley, the HGCA is expecting a 26% increase in harvest area to 1.23 million hectares, with England accounting for most of the increase. However, Scotland harvest area was also up, by about 5%, and could provide “much needed supply for the distilling sector,” provided the quality and yields were right, the HGCA added.
Meanwhile, oat area is likely to increase by 32% to 159,000 hectares, but oilseed rape area is forecast to be down by 9% to 686,000 hectares.
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