Shortage means higher prices for Irish grain
French analyst Strategie Grains called for greater use of grain substitutes, increased grain imports and a brake on grain exports, in addition to the resale of intervention grain on the EU market, which has already commenced.
They said a brake on exports, in the shape of an EU tax, could prove unnecessary, if the intervention resale scheme works efficiently, and if US wheat prices remain lower than European prices.
The Paris-based company last week cut its EU grain crop forecast to 185.8 million tonnes, from 209.2 million last year.
It said the EU must import between two and three million tonnes of maize, after the European maize harvest slumped to 32.1 million tonnes, from last year’s 40 million tonnes.
Strategie Grains predicts 83.3 million tonnes of wheat, down from 93.9 million tonnes last year.
The EU barley crop is expected at 46.3 million tonnes, from 47.7 million in 2002.
Leading world grain trader Nidera Handelscompagnie has predicted Brussels will take measures to reduce exports, such as export taxes, against a background of what it warns are dangerously low world wheat stock levels.
Global wheat stocks are predicted at 23% of usage by the end of the 2003/2004 grain year.
“Once you are below 20%, the world wheat market is generally characterised by significant volatility”, said Brian Thomsen, managing director, Nidera Handelscompagnie.
But with no major increase expected in wheat acreage over the next three to four years, global output will depend on yield prospects.
