UK wheat prices must fall in order to be more competitive to export to Europe.
As we approach the next harvest season, the question is whereabouts the surplus of wheat from last harvest lies and whether the UK will end up importing or exporting. Helen Plant, senior analyst of cereals and oilseeds at the Agriculture & Horticulture Development Board (AHDB), warned that UK wheat prices must drop if we are to export.
“At the moment, we are not exporting much relative to what we are importing. Our prices need to fall to European levels to be more competitive to export and the euro to pound exchange rate is not helping that to happen.
“We are in a space of limbo, as it is too early to make calls on the coming harvests – it will be mid-May when the Department of Agriculture releases its first estimate.”
Despite good harvest levels in 2014, the protein quality of the wheat was not high enough for use alone by UK bakers, and so much wheat was still imported. The quality of the UK harvest is more suited to European bakers.
“The question is how the picture is going to balance out in the longer term,” added Plant. “It is a very split wheat market between all the different grades – will we end up carrying wheat over into next year? It will be key to watch over the next few months to learn who will be exporting and where the wheat is going to be held, come the end of the season.”