Britain's farm ministry on Friday cut its estimate for UK domestic wheat consumption in 2008/09 and raised its import forecast, leaving a larger exportable surplus and raising the possibility of higher ending stocks. The ministry reduced its domestic consumption forecast to 14.08 million tonnes, from a previous estimate of 14.21 million, largely reflecting lower expected human and industrial use.
Imports were seen reaching 1.03 million tonnes in 2008/09, up from a previous forecast of 981,000 tonnes and the exportable surplus was put at 4.12 million tonnes, up from 3.94 million. Commercial end-season stocks were put at 1.88 million tonnes, unchanged from its previous estimate but up from 1.82 million for 2007/08. The ministry said, however, the stocks figure may be higher than the current estimate.
"The market profile of the 2008/09 and 2009/10 seasons provides significant incentives to carry stocks from one season to the next," the ministry said. "This suggests that actual stocks for end-June 2009 could well be significantly higher than the balance sheet implies."
New crop prices in Britain are currently trading at a significant premium to old crop in contrast to many years when they were available at a discount. Dealers have said this reflects an expected tighter supply/demand balance in 2009/10 with a smaller crop forecast after a drop in plantings and consumption likely to be boosted by the opening of a major bioethanol plant later this year.