"We take a long term view," said Southern Counties Agricultural Trading Society managing director Tim Pollock in a telephone interview.

"For SCATS it's an opportunity to continue to build on its position in the market in the South of England," he said.

Pollock was confident that in the longer term UK cereals growers were sufficiently adaptable to be competitive in international markets.

He did not expect current low world market price levels to last forever. "World market prices have been low, but they will go up," he said, pointing out rises over the past month.

Exporting would continue to have an important role for the sector in Britain. "The UK's exportable surplus will remain around four million tonnes a year," he said.

Recent official figures published by the Home Grown CerealsAuthority showed wheat exports (including any intervention stocks bought-in) at 3.260 million tonnes in 1998/99 (July-June), compared with 4.019 million tonnes of exports in the previous year.

Some 50 per cent of cereals produced in the Hampshire/Wilthsire area where SCATS is based are exported, Pollock said. "Exports are very important to our farmer members and customers." Exports through the Port of Southampton were 20 to 25 percent of the British cereals going abroad. Continental's share of that would make SCATS responsible for around ten percent of all British cereals exports, Pollock said.

SCATS will get Continental's Southampton deep water grain export facilities plus animal feedstuffs and fertiliser import facilities, it said in a statement earlier.

The agreement had been reached following a decision by US Agri-food giant Cargill that its proposed acquisition of Continental Grain's worldwide operations would not include the Continental UK assets.

SCATS will take on the Continental UK staff andproposes to relocate its existing grain trading and marketing team to centralise these activities at Continental's Southampton premises.

The agreement will take effect later this year, SCATS said. Speaking on the telephone, Pollock declined to be drawn any further on the date. "Property matters are always rather slow. It'll certainly be by harvest."

Late last year, Cargill, the largest private company in the United States, announced it planned to buy the grain business of its arch rival Continental. News of the deal was met with concern from farm groups and US Agriculture Secretary Dan Glickman, who expressed worries that concentration in agriculture was becoming more and more of a problem.