PARIS: France’s higher quality wheat harvest this year should allow it to win back exports of quality bread-making grain, but the European Union’s top producer faces familiar tough competition in a well-supplied global market. France was forced to hunt in Asia for livestock feed buyers in the 2014/15 wheat marketing season that ends this month, as heavy rain rendered much of last year’s crop unsuitable for making flour.
“The French will have to win back a little bit of their market share as much as places like South Korea will have to find their feed wheat somewhere else,” said James Dunsterville, analyst with Geneva-based AgFlow. “It’s swings and roundabouts and in it the end it all goes back to quality and prices.”
While quality is hard to call before the crop comes in, grain producers and agronomists polled during the Thomson Reuters Crop Tour said central and northern wheat belts were on course to see an improvement, while western France should maintain the reasonable results achieved last year. Improved quality should notably help France regain sales in its top market Algeria – where its exports have halved this season – as well as other markets in North Africa, where higher quality wheat from Russia and Germany has gained market share.
France, whose soft wheat exports are pegged at 11 million tonnes this season, down 9 percent on 2013/14, could also pick up sales if other countries hit quality snags, as feared in the United States after torrential rain in the southern wheat belts. Barring a repeat of last July’s soaking, French crops should avoid germination and see Hagberg falling numbers, a measure of the grain’s milling quality, return to normal, experts said.
Protein content, another key criteria for buyers, could benefit from favourable weather and changes adopted by farmers in response to a decade-long decline. In the western region of Poitou-Charentes, where crops are more advanced, cooperative Terre Atlantique said it would have the quality to supply its milling clients, of which three-quarters are in West Africa. But on many markets French wheat will be tussling with cheaper Black Sea milling wheat that has already pushed it out of contention in recent tenders held by top importer Egypt.
As previously, France will aim to step up shipments from the middle of the season when Black Sea offers slow, with the hope Russian shipments could tail off quickly if a planned new export tax starts to bite. The euro, whose drop against the dollar helped turn around France’s 2014/15 exports, could also tips the balance in a world market that is set to see ample production again. “Today, we’re in a market that’s about exchange rates. Not much has changed in supply and demand fundamentals,” Michel Portier, head of consultancy Agritel, said.
