UK wheat supplies will swell in 2022-23 to their largest in seven years, even factoring in a rise in demand for making bioethanol and a dip in high-priced imports, the AHDB bureau said.
The bureau, in its first full balance sheet forecasts for this season, estimated at 2.25m tonnes the UK’s exportable surplus of wheat – “over 1.5 times 2021-22 levels of 857,000 tonnes, and the largest surplus since 2015-16”.
The forecast reflected a boost to supplies both from higher carry-in stocks and a harvest of 15.66m tonnes, the best in three years, lifted by “higher-than-average yields”.
The “heavy wheat balance” is leading to a “substantial exportable surplus”, the bureau said.
‘Not pricing as competitively’
The bureau forecast wheat demand expanding by some 170,000 tonnes year on year to 14.98m tonnes, led by growth in human and industrial consumption, in particular by the country’s two ethanol plants, Ensus and Vivergo.
“Wheat usage in starch production is also forecast to rise this season, on the back of increased capacity.”
Meanwhile, UK wheat imports will fall by 39% to a three-year low of 1.23m tonnes, as “they are not pricing as competitively”.
Imports of German milling wheat have during the autumn been pricing £10-25 per tonne above values of domestic supplies, AHDB data show.
However, with this year’s UK harvest holding, on average, a lower protein count than last year, “a proportion of imported high protein milling wheat will be required to ensure continuity in the grist”.
UK wheat imports for the July-to-September period are, at 342,685 tonnes, down by 46% year on year, with the high-quality supplier of Canada by far the top origin.
Wheat vs maize
The AHDB forecast a fall in the UK’s maize (corn) imports too, of 9% to 2.01m tonnes, a six-year low, as this year’s improved harvest allows domestic grains to attract more demand.
“Bioethanol usage [of maize] is expected to fall on the year, with wheat pricing more competitively,” the bureau said, with domestic feed wheat pricing roughly £15 a tonne cheaper during the autumn to northern England, where the ethanol plants are based, compared with imported Ukrainian corn.
For feed mills too,” the relative price of maize higher domestic supply of wheat is expected to cap maize inclusions in rations”.
This shift will come as feed demand for grains overall shrinks by 273,000 tonnes to a six-year low of 12.85m tonnes, as the UK’s cost-of-living crisis shrinks demand for meat.