August 21, 2014

21/08/2014: France rain-hit wheat crop offset with imported supplies

France's rain-hit wheat crop has delivered the first shock of the 2014/15 season: the EU's top grower and exporter is buying Lithuanian and British milling wheat to mix with its unusually poor-grade crop to meet contracts signed before the harvest, reports Reuters.

French exports exceed those of Britain and Lithuania on the world market, but a wet summer has meant France is set to produce more wheat for animal feed and less higher grade bread-making grain this year.

The imports are the latest signal that France might struggle to retain its market share of milling wheat exports this season because a large part of its crop is failing to live up to its traditional clients' criteria.

During the past 13 years for which Reuters has records, France has only once imported significant amounts of Lithuanian wheat.


That was during the 2010/2011 season, which was also beset by quality problems.

The total amount imported then, at 22,600 tonnes, was less than the single shipment of 27,500 tonnes of high protein-content wheat, which trade and port sources told Reuters was being unloaded at the Port of Rouen on Thursday.

The French imports point to the potential for more unusual global grain trade flows this season.

"Clearly there is a significant quantity of feed wheat in France which is normally not there, therefore they are struggling to fulfil some of their normal export destinations and obligations," said a trader in Britain.

"Consequently grain has been bought to replace that French wheat from Scandinavia, Germany, Poland, the UK."

France's key markets in North Africa, particularly the world's fourth-largest wheat importer Algeria, are expected to look beyond their traditional supplier for future purchases but in the meantime, French exporters are meeting existing contracts by mixing in higher quality foreign wheat.

"I think that France will certainly have a problem with high-volume sales to some of its traditional markets this year, especially Algeria and Morocco," a German trader said.

"The French are also likely to be aggressive sellers of feed wheat which could be offered in the Arabian and Asian markets as a competitor to corn," he added.

As for British milling wheat, a shipment of 3,000 tonnes reached Dunkirk earlier this week. A second, for 4,400 tonnes, was in Rouen on Thursday, and others should follow, the sources said.


Britain, which had a reasonably good quality harvest this season, is a more regular supplier of wheat to France, but its exports are usually aimed at the lower quality animal feed market.


Read more HERE.
 

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