Traders struggle to export farmers' grain surplus amid Brexit uncertainty
PUBLISHED: 07:13 31 October 2019 | UPDATED: 07:21 31 October 2019
The success of East Anglia's wheat and barley harvest is being undermined by an inability to export the surplus due to the shifting sands of Brexit, says a Norfolk grain trader.
Defra's provisional harvest figures for 2019 show UK wheat production increased by 20.1pc to 16.3m tonnes, at an above-average yield of 9.0 tonnes per hectare. Meanwhile total barley production has leapt by 25.6pc to 8.2m tonnes, fuelled by a yield increase of 22.7pc to 7.0 tonne per hectare.
But although growers in East Anglia's arable heartlands welcomed the high yields, traders have been struggling to export the surplus grain.
Andrew Dewing, chief executive of Aylsham-based merchant Dewing Grain, said he has been unable to sell cargoes in advance because European buyers were wary of the risk of punishing tariffs being applied in the event of a no-deal Brexit.
The EU's recently-agreed deadline extension to January 31, while not completely removing that threat, has created a window of continued free trade - but he said many export opportunities had already been lost.
"Harvest 2019 was a good harvest but the political uncertainty has left us in a position where we couldn't export anything up to a week ago," said Mr Dewing.
"Any country like Ireland, Holland or Spain which needed wheat in November won't be waiting until the last week of October to make a sale. We missed 70-80pc of the potential trade and this is something that has gone on for two years.
"We didn't sell any forward cargoes on this harvest until we got to March 2019, when we got the Brexit extension until October. The minute that extension was granted we knew we would be trading on the same terms with no tariffs applied.
"We would normally do four cargoes of wheat in November and we would have sold them a year in advance. The reason we have got nil November boats at the moment is because we have been unable to trade it until last week.
"So although it has been a good harvest it has been disastrous in our potential to clear the surplus. It has been very bad for agricultural trading.
"We have now got a window to export for a bit longer, but we still don't know if Boris Johnson is going to get us out of the EU with no deal, so we cannot commit a cargo for February, because we don't know it will be without tariffs.
"Last week when they came up with that decision to extend, the price of UK wheat has gone up £6 per tonne compared to French wheat. That is the instant effect of the extension. It has given us until February to export the surplus."
Mr Dewing said he was also concerned about a potential future trade regime which could open UK markets to cheaper, lower quality food commodities while applying tariffs to exports, saying it would "sell farmers down the river".
More immediately, he said the price of the 2020 cereal crop is already being affected by the prolonged wet weather which has delayed planting across East Anglia, and brought concerns over the eventual yield.