Higher wheat demand from the UK ethanol industry will lead to record domestic wheat 

consumption of 15.69 million mt in the 2016/17 season, a rise of 6% year on year, est

imates by the UK Department for Environment, Food & Rural Affairs showed Wednesd

ay. 

The figure was 12,000 mt higher than Defra forecast in March for the July 2016 to Jun

e 2017 reporting season. 

As a result, the UK was expected to have become a net importer of wheat for only  the 

fourth  time in at least  25 years, as Defra  raised its estimate for UK wheat imports this 

season to 1.70 million mt, 100,000 mt higher than the March estimate. 

"Compared with the March forecast, demand from the bioethanol industry has been revi

sed up. This has more than offset a slight decline in usage by flour millers," the Agricult

ure and Horticulture Development Board said. 

The main ethanol producers in the UK are CropEnergies' Ensus and Associated British 

Foods' Vivergo with annual production capacities of 400,000 cu m and 420,000 cu m, 

respectively. 

CropEnergies recently announced an  increase in its  revenue  forecast, which it mainly 

attributed to the high utilization of its production facilities and, most of all, UK plant which

had been temporarily shut in the previous year. 

Attractive ethanol prices and margins would have also provided an incentive for producer

s to run their plants and, despite an extended maintenance period by Vivergo in  January 

and February and market talk regarding Ensus run rates, both producers may have provi

ded a better-than-expected source of demand for UK wheat.