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Global stockpiling sees wheat prices hit £175 per tonne

It is not just shoppers who are stockpiling in the face of coronavirus, with countries holding back grain to keep for their own food supplies, helping push up UK grain prices.

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Global stockpiling sees wheat prices hit £175 per tonne

London wheat futures prices hit a season high of more than £165/tonne last week, before easing, while the new crop hit £175/t at one point.

 

Alex Cook, analyst at AHDB, said: “The Russian Agriculture Ministry has proposed a limit on its grain exports of seven million tonnes for the remainder of the season to maintain domestic supplies during the coronavirus pandemic.”

 

Vietnam has also suspended rice exports.

 

It is the world’s third largest exporter of the food and it could reduce world availability by up to 15 per cent.

 

Kazakhstan has suspended exports of wheat flour and vegetables.

 

Other countries were seeking to boost stocks of essential products by increasing purchases.

 

Egypt has been in the market for wheat but delivery is being hampered by delays at key ports.

 

Libya also announced it needed 1mt of wheat and 250,000t of rice, although most major Middle Eastern buyers were thought to be reasonably covered until the end of June at least.


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Trade

 

Meanwhile, China is reported to be back in the market, with trade returning as its virus outbreak recedes.

 

This is despite the country already holding nearly half the world’s wheat stocks.

 

The weak pound should give UK wheat exports some support in what has already been a good year for shipments.

 

Wheat exports in the seven months to the end of January were at 891,690t, according to HMRC figures, which was more than three times the amount in the 2018/2019 season and more than double that of the year before.

 

Barley exports were 150 per cent higher at 1.3mt.

 

Exports

 

Trade was boosted by the threat of a no-deal Brexit before the December 2019 General Election.

 

However, UK wheat exports are likely to come to a grinding halt after the harvest when British crop will be short due to the lack of winter planting.

 

That will continue to support UK grain prices but mean much higher feed prices for livestock producers, AHDB analysis showed.

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