Bringing it back to Blighty; if this was a game of the old school playground popular ‘Top Trumps’, the UK, however, would notably be one of the most consistent performers. 5th most productive / highest yielder (7.95mt/ha 08-17 average), 13th biggest global producer (08-17 average 14.86tmlnt), but also, interestingly, a net importer of wheat as Europe’s third biggest of non-EU origin’s behind Italy and Spain.


Historically, the UK’s appetite for imports has been driven by the demand and need for speciality and high protein wheats. The typical British household white sandwich loaf is a grist of UK grown and imported high protein wheats. Shipped into the EU tariff free (12.5 EUR level applies to medium and low protein wheats), UK millers, therefore, have a relatively inelastic demand of 350,000mt of Canadian and 100,000mt of US high protein wheats. French artisan breads unsurprisingly see imports of French wheats requiring additional intra-EU imports of 150,000mt of French wheat plus 200,000mt of German and, in recent years, up to 50,000mt of Polish wheat depending on the price spreads and import costs.


More recently though, increasing domestic consumption from animal feeding but also notably domestic ethanol production, has driven industrial demand and, therefore, increased the need for higher imports. The UK has, therefore, evolved in the past few seasons to a net importer from that of an exporter (excluding the wet outlying years of 2012/13 and 2013/14).


Previous typical exports of 1.5mlnt to 2.5mlnt of wheat exports into Europe (Netherlands, Ireland, Spain and Portugal) and North Africa (Algeria, Morocco, Tunisia) now look to set to be replaced by higher additional imports of feed wheat over and above the historical high protein milling wheat imports of 850,000 to 900,000mt. Recent origins have included additional French, Danish, Baltic and Black Sea wheat helping to increase not only intra-EU trade (29mlnt in 17/18 vs 24mlnt in 10/11) but also non-EU imports into the 28 country bloc of 3.9mlnt in 17/18 vs last year’s 3.29mlnt.


With the UK more domestically orientated, growers and producers have benefited from higher domestic prices, offering an increased protection to the perils of global markets. Domestic cash premiums in the north of the UK, where demand is concentrated, has seen premiums over futures rise to record levels and spreads of over £17 to southern homes. The devaluation of sterling from Brexit has also coincided to provide growers with an additional 15 to 20% boost in revenues thanks to tighter price spreads to other EU origins.


Outlook for the future continues to see UK domestically driven and a net importer of wheat (please see table 1).


George Eddell E: george.eddell@admisi.com T: +44(0) 20 7716 8054


Table 1: UK Wheat S & D 2010/11 WHEAT


OPENING STOCK PRODUCTION IMPORTS


TOTAL AVAILABILITY


HUMAN / INDUSTRIAL USE OF WHICH ETHANOL OF WHICH MILLING ANIMAL FEED SEED / OTHERS


TOTAL DOMESTIC CONSUMPTION BALANCE


CLOSING STOCK EXPORT


2.027


2011/12 2012/13 2013/14 2014/15 2015/16 2016/17 2017/18 2018/19 Estimate 1.554


1.537 0.908 6.816 6.475


4.040 1.495 2.545


1.495 2.956 2.186 2.208 2.014 1.554 2.434 1.504 2.787 1.834 1.522


14.874 14.878 13.261 11.921 16.278 16.444 14.352 14.605 14.366 1.001


1.630


7.572 0.575


6.847


2.923 2.186 1.473


7.400 0.759


6.115 0.371 304.000 0.355


2.445 2.014 0.431


7.980 1.111


7.084 0.395


4.387 2.430 1.957


7.313 0.800


7.114 0.310


5.645 2.787 2.858


6.144 0.369


8.125 1.435 4.804 7.525 0.355


7.870 1.250 4.805 7.500 0.350


1.600


17.906 17.702 17.712 16.315 19.846 20.382 18.973 17.757 17.520 7.201


7.970 1.350 4.810 7.200 0.350


13.714 13.662 14.789 13.870 15.459 14.737 16.005 15.720 15.520 4.192 1.537 2.655


2.968 1.522 1.446


2.037 1.554 0.483


2.000 1.650 0.350


22 | ADMISI - The Ghost In The Machine | May/June 2018


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