French grain sector fears export squeeze as strikes hit logistics
Strikes over pension reform in France could slow grain exports from this month by preventing enough supplies from reaching ports and by making the French crop too expensive to compete overseas, industry participants said on Friday.
A month-old public transport strike that has crippled rail services and rolling stoppages by dock workers have left companies in the European Union’s biggest grain producer struggling to get grain to ports and onto vessels during a period of strong overseas demand.
Exporters could face a shortage of grain to ship in the second half of January if strikes continue, Soufflet, one of France’s top grain exporters, said.
“There is a difficulty supplying port silos. If the trend was to continue, we risk having a supply shortage,” Jean-Francois Lepy, head of the company’s trading branch Soufflet Negoce, told a news conference.
So far, grain firms have managed to keep export vessels supplied by scooping up stocks in zones close to ports and by turning to lorry transport.
That has already brought extra costs as lorries are more expensive than trains, while the rush to find supplies has pushed up wheat prices.
Soufflet Chairman Jean-Michel Soufflet told reporters that 23 trains of 1,200 tonnes each it scheduled had been cancelled as of the end of last week due to the strikes, while Jean-Francois Loiseau, chairman of grain cooperative Axereal, tweeted that his group had seen 120 trains cancelled so far.
Grain companies say it requires about 40 lorries to carry the same amount of grain as one freight train, which typically carries 1,200 tonnes.
River barges offer a cheaper alternative to lorries but are not an option in some regions while exporters were still facing loading disruptions at ports due to docker walkouts.
All shipments were blocked since Thursday in the ports of Rouen and La Pallice, France’s two largest grain export hubs, due to a latest docker strike and were only expected to resume on Monday, port service firms said.
Senalia, a storage and loading operator at Rouen, said a drag on exports could be felt in the spring if supplies near ports are exhausted and firms decide to hold stocks over to next season.
“We could have an end of the export campaign that is a damp squib,” Gilles Kindelberger, managing director of Senalia, told reporters at the group’s annual meeting.
Soft wheat exports from French ports reached a six-year high in December despite the strikes, while and farm agency FranceAgriMer forecasts the volume in the 2019/20 season ending June 30 will be a quarter above last season’s level at 12.2 million tonnes.
Source: Reuters (Reporting by Sybille de La Hamaide and Gus Trompiz;Editing by Elaine Hardcastle and Marguerita Choy)