Wheat imports into the UK this year are forecast to be at the highest volumes since 2012, partially due to a smaller domestic wheat crop with lower proteins.
The AHDB anticipates that the UK will import 2.6m tonnes of wheat during the 2024-25 crop year, up by 7% on the year and 40% above the five-year average.
Several hauliers have already noticed a greater number of vessels carrying grain into UK ports, which raises questions around the perceived lack of comparative assurance standards required for imports in contrast with UK farmers.
At AHDB’s Grain Market Outlook conference on 5 November, senior analyst Olivia Bonser said: “Because of competitive imports coming in, we have seen the premium drop back slightly lately.
“In September, the ex-farm milling premium over feed wheat averaged just under £48/t, where as in August it was just over £57/t, and in the same month last season it was nearly £60/t.
“It has eased back slightly, but historically, it is still quite firm.”
Figures collected by Farmers Weekly on 6 November put ex-farm milling wheat at £213/t – a £35/t premium to feed wheat.
Ms Bonser said that even with firm imports and large opening stocks, total availability of wheat was still expected to be fairly tight this season.
AHDB has estimated that after accounting for human and industrial usage of 7.54m tonnes and animal feed usage of 6.46m tonnes, it would leave a UK balance of just 2.63m tonnes.
Longer term trends
Ms Bonser outlines several key factors which could impact on UK grain markets longer term:
- Fairly limited growth on animal feed demand expected and flour milling likely to stay quite steady
- Fluctuations in volumes is likely between what is imported for milling versus what is home-grown
- Bioethanol could vary quite a bit depending on maize-to-wheat price ratio
- Malting and distilling to be a key watchpoint with potential downturn in demand.
Global markets
Victory for Donald Trump in the US election and, therefore, the increased likelihood of US tariffs on trade with China was already being factored into global markets as Farmers Weekly went to press midweek.
Looking at supply, a global grain deficit remains despite slow demand growth.
AHDB senior cereals and oilseeds analyst Helen Plant said there had been some early concerns for new crop with a drier-than-usual start for crops in Russia and Ukraine, which had massively delayed plantings.
She added that there had also been drier conditions in US winter wheat areas, but wetter-than-normal conditions in the key European countries.
Ms Plant said: “It’s quite a fragile market at the moment, relatively finely balanced with a little bit of potential for upside and downside movement, but it is built on that weak demand basis.”
Changing times
AHDB economics and analysis director David Eudall said, over the years, analysts have continued to talk about increased volatility, and nowadays that is just the way grain markets operate.
Volume of information on global grain markets has rapidly changed with faster flows of information available, and AHDB played a role in deciphering this and providing an independent and impartial voice, he added.
The numbers
2.6 UK wheat import volumes forecast 2024-25 (million tonnes)
40% Increase in UK wheat imports compared to five-year average
£35 Milling wheat premium (£/t)
Source - https://www.fwi.co.uk
