BRUSSELS, BELGIUM — Exports of E.U. cereal crops are estimated at 60% above average, and this year’s harvest is forecast to be 6% higher than average levels, according to the Short-Term Outlook for E.U. arable crops released on July 10.
The 2014-15 marketing year closed with a record production at 329 million tonnes of cereals (14% above average) and exports estimated close to 60% above average at 47.5 million tonnes. The final stock-to-use ratio forecast, all cereals included, is at 18% at the end of the period (against 13% in 2013-14).
Oilseed production reached 35 million tonnes in 2014-15 exceeding the previous harvest by more than 12%. New cereal harvest for 2015 is forecast for the third year in a row at 6% higher than average levels.
Total cereal production of 329 million tonnes is 14% above the 5-year trimmed average and 8% higher than the previous year. The area increased only slightly by 0.6% but yields by 7.5%, boosted by exceptional climatic conditions especially during summer. The main contributions to the increase in production are soft wheat (10%) and maize (17%).
Soft wheat reached a record of 149 million tonnes with increases in all the major producing countries; France up 1.7% (37.5 million tonnes), Germany up 11% (27.7 million tonnes), the U.K. up 39% (16.6 million tonnes) recovering from a previous bad year and Poland up 23% (11.6 million tonnes).
By contrast durum wheat production declined by about 5% mainly due to reduction in area in Spain (-14%) and France (-15%).
Maize production increased by 11 million tonnes to 78 million tonnes, allowing the E.U. to reach self-sufficiency with strong contributions from France, Hungary and Italy mainly due to yield improvements.
Barley production declined slightly 1%, mainly due to a 2.4% decrease in area.
At the end of the 2014-15 marketing year the E.U. cereal net exports are estimated at 32 million tonnes, 8 million tonnes more than the previous year. Exports are estimated to reach a record level of 47.5 million tonnes, boosted by a competitive exchange rate with 31.5 million tonnes of wheat (48% higher than average) and 11 million tonnes of barley (70% higher than average).
Maize imports decreased by 6 million tonnes.
Official trade data, from July 2014 up to April 2015 show a strong increase of extra-E.U. wheat export from Germany (5 million tonnes against an average of 3), Romania (3.7 against an average of 1) and Poland (2.5 against 0.3 on average), while French exports are stable at their usual high level (8.5 million tonnes).
Wheat exports destinations were the traditional ones; Algeria (up 31%), Egypt (up 101%, from 1.8 to 3.7 million tonnes), Iran (up 94%), Saudi Arabia (up 189%) and Morocco (up 15%).
Barley exports increased significantly to traditional Middle East destinations and as a new market, shipments to China were up from 155,000 tonnes to 1.8 million tonnes.
As for imports, the autonomous tariff rate quotas for wheat and maize for Ukraine of about respectively 1 million and 140,000 tonnes were completely filled while the one for barley (250,000 tonnes) was only used at 6.5%.
Animal feed use is estimated at a higher volume than in 2013-14 (up 5% at 172.5 million tonnes) supported mainly by increases in animal production and livestock numbers and low cereal prices, with a substantial contribution of wheat (feed use up by 22%).
The final stock-to-use ratio for all cereals at the end of the period is forecast at 18% (against 13% in 2013-14), 11% for soft wheat, 16% for barley and 30% for maize. Stocks were replenished substantially however the stock-to-use ratio remains below the exceptional level of 2008-09 and 2009-10.
The recent reports of the International Grain Council (IGC), the USDA and FAO-AMIS see a 2015-16 world cereal production decreasing from the previous record year (-2.3% for IGC, -0.8% for the USDA and -1.6% for FAO-AMIS) but still above average.
In the IGC analysis, because of an increasing food and industry consumption the final wheat stocks are expected to go down slightly by 0.9% for the world (but to increase for the main major exporters by 1.1%) while maize stocks are projected to decline by 6.7% bringing the stock-to-use ratio from 20% to a still 'comfortable' 19%.
First projections for the 2015-16 marketing year anticipate a cereal harvest at 307 million tonnes, which is 6% above average and 7% below the 2014-15 record. First estimates show a reduction in areas of about 0.8%, mainly due to lower market prices, and driven by a 1.3% decline in soft wheat sowings, 4.4% for maize and 7.6% for triticale whilemore hectares are projected for barley (up 1.7%), rye (up 6.3%) and oats (up 2.3%).
Overall yields are expected to return to more normal levels. The production reduction compared to last year is projected for all cereals with the exception of durum wheat (up 3.7%). Durum wheat areas (up 4.2%) at the time of sowings were fostered by better prices compared to the previous year and by the introduction of voluntary coupled support in some regions.
The combination of two consecutive years of record oilseed production, in 2014-15 and as anticipated in 2015-16, due to excellent growing conditions, together with a stagnating biodiesel demand due to low oil prices, lead to world stock replenishment and lower prices.
The 35-million-tonne E.U. domestic oilseed production in the 2014-15 marketing year exceeded the good harvest in the previous year by more than 12%. This increase was fully driven by higher yields (up 15%) due to favorable growing conditions, while the overall planted area decreased 2%.
E.U. rapeseed area remained stable though. For sunflower seed, the higher yield did not compensate for the strong area decrease and production declined slightly by 1.4%. Due to the excellent 2014 harvest, the E.U. oilseed self-sufficiency rate increased from 67% in 2013-14 to
74% in 2014-15.
The record E.U. rapeseed production and low soybean crushing margins leads to an anticipated considerable reduction in imports of soybeans (-11%), sunflower seed (-23%) and especially rapeseed (-25%) in 2014-15.
Meal imports are projected to remain largely stable in 2014-15. Total domestic use, driven by low prices and expanding meat and dairy production, increased both for oilseeds and meals. The favorable growing conditions in key exporting countries (especially Ukraine) and the comparatively low E.U. production led to an increase in sunflower meal imports, while meals from E.U. grown rapeseed and sunflower seed substituted a part of the soybean meal domestic use.
In line with the contracting biodiesel demand linked to low oil prices, E.U. domestic vegetable oil use is expected to stagnate. The large oilseed (and hence oil) production in the E.U. reduced imports of palm oil (mainly from Malaysia, Indonesia and Thailand), rapeseed oil (from Russia and Canada) and soybean oil (from the U.S.). The lower E.U. sunflower seed production and good harvests abroad on the other hand strongly increased sunflower oil imports.
World oilseed production in 2015-16 is projected at 532 million tonnes, slightly below last year's record of 536 million tonnes (USDA), due to a combination of increased plantings (e.g. in Brazil and the U.S.) and/or higher than average yields (e.g. in Argentina). As a consequence, the already high stocks are expected to increase further to a record stock-to-use ratio exceeding 30%. Meteorologists recently raised the probability of an upcoming El Niño event, which might affect the current production in certain areas (mainly negatively in the region around India, Thailand, Indonesia and Australia, affecting a.o. palm oil and rapeseed production).
In the E.U., total oilseed planted area is expected to equal last year's (11.5 million hectare), but among the crops an increase in sunflower and linseed plantings is expected, at the expense of rapeseed and soybeans.
Yield estimates indicate a decline of 8.5% compared to 2014-15, mainly for soybeans (down 15%) and rapeseed (down 10%), which will affect total production.