French wheat exports to gain from Russia supply drop
A brisk start to France’s wheat export season and less competition from Russian supplies led farming agency FranceAgriMer to raise its forecast for French soft wheat exports outside the European Union in 2018/19.
FranceAgriMer pegged French soft wheat exports to non-EU destinations at 8.75 million tonnes, up from its initial outlook of 8.5 million in September and well above 8.1 million in 2017/18.
Exports outside the EU in the first three months of the season that began on July 1 were 24 percent above the year-earlier volume, the agency said.
“Volume, quality and price are all going in favour of a better export performance than last season,” Remi Haquin, head of FranceAgriMer’s cereal committee, said.
“The Russians have less to export and they are going to have to slow down,” he told reporters.
Russia, the world’s largest wheat exporter, has been in the spotlight because traders anticipate that a smaller harvest and a fast start to the country’s export campaign will cause shipments to tail off.
Rising exports of cheaper Russian wheat have eroded French sales in North and West Africa, and French exporters also fear Russian efforts to gain access to Algeria’s tenders will threaten France’s main overseas market.
France is planning to send a delegation to Algeria early next year to discuss grain trade, an official said on Wednesday.
Russian wheat was not expected to enter the Algerian market this season and its longer-term prospects there would depend on its capacity to meet Algeria’s requirements, Haquin said.
Russian wheat is effectively precluded from Algeria’s tenders due to a strict limit on bug damage. Haquin said that if Algeria maintained its import terms Russia would have to invest in sorting processes to meet the requirements.
Traders are more cautious about French exports this season after a lull in the past month. French exporters group Synacomex said on Tuesday it expected soft wheat exports outside the EU to reach 8.3 million tonnes.
FranceAgriMer lowered projected soft wheat exports within the EU, to 7.9 million tonnes from 8.1 million last month, reinforcing an anticipated reversal of the trend in the past two seasons when intra-EU trade outpaced exports beyond the bloc.
Expected soft wheat stocks in France at the end of the 2018/19 season on June 30 were trimmed to 2.4 million tonnes from 2.5 million last month.
The office made a sharper cut to projected maize (corn) stocks, lowering its forecast to 2.0 million tonnes from 2.5 million, reflecting a cut to expected harvest supply and a shift in livestock feed demand from wheat and barley towards maize, the data showed.