Global shortage of cereal crops looms

- Last updated on GMT

Related tags: Malt, Wheat

With cereal growers having benefited from increased prices this
year, attention is being paid to predictions on the 2004 crop amid
fears that the world cereals stocks could suffer because of an
over-reliance on weather and conditions.

With cereal growers having benefited from increased prices this year, attention is being paid to predictions on the 2004 crop amid fears that the world cereals stocks could suffer because of an over-reliance on weather and conditions.

Yesterday, a leading industry economist strongly advised farmers to pay significant attention to all of the worlds major grain growing areas, looking at how the weather behaved and not just the local climate forecasts.

"If there is any problem with the weather, then there could be a real crisis"​, said Julian Bell of the Home-Grown Cereals Authority, he added that such situations would make the market volatile.

At present, world wheat production is running at around 29 million tonnes behind consumption and unless changes are made, and made quickly, the situation will become more acute.

"With the world cereal stocks now at a 10 year low, the whole industry is now on tenterhooks for the 2004 crop year"​ said Bell.

A strong factor in the equation, but not for the immediate year, is the cereal growing potential of those countries that have just joined or are joining the European Union. Alistair Dickie, marketing director with the HGCA, speaking at the meeting in Kelso, pointed out that the EU was merely six months away from increasing its membership and as far as agriculture was concerned, the majority had mainly rural economies.

Hungary and Poland, two countries that have highly variable yields, were said to have the potential to grow grain far in excess of domestic requirements. Although, production of grain in the existing EU in the close season has proved that even the most technologically innovative pieces of equipment can become a major cropper if the weather is adverse. It is estimated that EU grain yield is down significantly by 25 tonnes this year.

Franz Fischler has suggested, as a result of poor output, a reduction in next year's set-aside moving from this years 10 per cent down to 5 per cent. Bell believes that this is not a viable solution, he said that even if the EU Agricultural Council sanctioned the move, it would not have a dramatic effect on the overall equation.

Douglas Morrison, a former convener of the Scottish NFU cereals committee, agreed with this assessment, but stressed that the same case would not apply in France, where in the fertile areas any change in acreage would immediately impact on the final tonnage.

"The world malt market is well supplied and the UK has to sell on the world market. The 17 tonne premium paid last year, reflected a market where there was a lot of poor grain around, the opposite is true this year"​, said Bell, paying particular attention to the low level of premium paid for malting barley this season.

Related topics: Ingredients

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