Drought, wheat exports led to curb in domestic grain supplies
The European Union has issued licenses to import 3.6 million metric tons of corn since the marketing year began on July 2, more than twice the amount issued in the previous year, according to data. A drought that ruined crops and a surge in wheat exports that curbed domestic grain supply have created challenges and led to an expected rise in purchases — up 59 percent, to 10 million metric tons, the second-highest for data to 1999, said the International Grains Council.
“There were problems in the southern areas, especially Romania, where crops looked very poor, and in Italy and Hungary as well,” said Nathan Kemp, an economist with the council. “There’s a shortfall this year, plus with the wheat market price differential, it makes sense to export wheat, so that takes it away from feed channels.”
The International Grain Council’s forecast for EU corn imports is 85 percent higher than the U.S. Department of Agriculture’s most recent estimate. Purchases of 12 million metric tons would make the EU the world’s second-biggest buyer after Japan, and EU corn output fell 19 percent this year, according to the European Commission. The extra supplies are most likely to come from Ukraine and South America, said Jeff McPike, a grains trading manager at Cefetra BV. The U.S. probably won’t ship more because of the EU’s restrictions on most genetically modified varieties prevalent in North America, he said.
Ukraine supplied the EU with almost 600,000 metric tons of corn in the three months through the end of September, more than 13 times the amount in 2011, according to the council. Argentina has been the second-largest supplier at 74,400 metric tons, up from 42,400 metric tons in 2011.