UK Supply & Demand 2016/17

The first official estimates for supply and demand of cereals for harvest 2016 have been published by AHDB Cereals & Oilseeds.  The levy body is estimating a much smaller surplus available for either export or in year-end stocks for both wheat and barley compared with the 2015 harvest year.  

Our article covering the June Census shows DEFRA’s first estimate of 2016 wheat production is 14.47Mt;12% less than in 2015.  In addition, imports are forecast to be 17% lower than the previous year.  Although the production of wheat was less than last year, the quality in general is higher than average and therefore domestic demand is expected to largely be met by this better quality wheat. Furthermore the weakness of Sterling is making imports less attractive.  This means that, although opening stocks were 15% higher at the start of the year, overall availability in 2016/17 is estimated to be 9% lower at 18.509Mt.  Human and Industrial wheat usage is forecast to increase by 8% to 7.915Mt mainly due to increased demand from bioethanol following the reopening of one of the main plants back in July.  This leaves a surplus available for either export or free stock of 1.193Mt.  This is significantly lower than last season (-71%) but it must be remembered these are initial estimates.

Opening stocks for barley are estimated to be lower than last year at 1.367Mt.  With reduced production, the lowest since 2012 (see June Census article) and imports expected to be less year-on-year, available supplies are forecast to be 8.149Mt.  This is 10% less than in 2015.  Human and Industrial usage is expected to increase by 2%.  However, animal feed is forecast to reduce by 4%.  The surplus available is estimated to be 1.848Mt; 29% lower than last year.  Again, it must be remembered that these are early forecasts.  The first official DEFRA balance sheet estimates will be available on 23^rd November.