EU cereal prices predicted to be high and unstables, says EU Commission
EU cereal prices are predicted to remain high and unstable and are wary of the destabilising effect of other commodities such as maize and wheat.
Despite drought being in certain member states, the European Commission predicts the full year EU cereals forecast to be only 2% lower than the average over the past five years at 279 million tonnes.
Dacian Ciolos, the European Commissioner for Agriculture and Rural development, said: “Over the past weeks, the drought in several regions of the world has led to dramatic price increases for certain commodities, mainly maize and soya which risk destabilising certain sectors of the European agriculture.
“This excessive volatility of markets shows clearly that world agriculture requires investments, public management policies and predictability”.
The soft wheat is forecast to remain near the five year average at 127m tonnes.
However, world carryover stocks are set to fall by 33m tonnes to 338m and the stocks versus consumption ratio remain largely unchanged on last year, which is likely to keep prices high, says the Commission.
Jack Watts, the senior market analyst for the Agriculture and Horticulture Development Board (AHDB) and the Home Grown Cereals Association (HGCA) said last month that bakery and snack manufacturers can expect higher wheat prices in the coming months as a US drought has hit the maize market putting pressure on wheat supplies.
The EU is in the process of revising the Common Agricultural Policy (CAP), which is expected by next year.
Forecast were presented to EU member states in the Management Committee on Thursday last week.