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UPDATE 1-UK wheat imports soar as crop poor, demand at record

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(Globalpost/GlobalPost)

* Poor UK wheat crop triggers sharp rise in imports

* Biofuel expansion sends UK wheat demand to record levels (Adds details, quotes)

By Nigel Hunt and Sarah McFarlane

LONDON, Jan 30 (Reuters) - Britain's wheat imports are expected to more than double in 2012/13, boosted by a poor domestic harvest and record consumption as the production of bioethanol expands, farm ministry figures showed on Wednesday.

The ministry forecast wheat imports would climb to 2.19 million tonnes for the year to end-June 2013, up 144,000 tonnes from its previous projection and sharply above the prior season's 908,000 tonnes.

Imports during the season's first five months to end-November at 1.04 million tonnes already surpassed the total for the entire 2011/12 season. That level was the highest in 19 years for the five-month period.

Britain had a poor wheat crop last summer, with yields slumping to a 23-year low and quality hurt by high disease levels, following the wettest June since records began more than a century ago.

Agriculture, forestry and fishing as a whole represents 0.6 percent of the UK economy, with wheat by far the most important arable crop.

"Wheat imports are supporting record UK consumption levels with little evidence that strong prices are dampening demand," the Home-Grown Cereals Authority said in a note issued with the ministry data.

BIOETHANOL FUELS DEMAND

Domestic consumption was forecast to rise 7 percent to 14.65 million tonnes, driven by a 16 percent increase in human and industrial use to 7.93 million tonnes, the ministry data showed.

Wheat usage for animal feed was forecast to fall by 2 percent to 6.33 million tonnes.

"Year-on-year increases in bioethanol and distilling capacity more than compensate for some diversion of wheat demand to maize," the ministry said.

Bioethanol is a petroleum substitute that can be made from grains or sugar.

Vivergo Fuels announced last month that it had started bioethanol production at a new refinery near Hull in eastern England and expected to be fully operational in the first quarter of 2013.

The biorefinery has the capacity to use 1.1 million tonnes of feed-grade wheat per year.

Britain's other major bioethanol producer, Ensus, restarted its biorefinery in late August 2012 after a 15-month shutdown. It uses about 1 million tonnes of feed wheat, although this year it has blended in some imported maize due to the poor quality of the UK harvest. (Reporting by Sarah McFarlane; editing by Keiron Henderson and Jane Baird)

http://www.globalpost.com/dispatch/news/thomson-reuters/130130/update-1-uk-wheat-imports-soar-crop-poor-demand-at-record