France could ship more wheat within the European Union than on the world market for the first time in seven years after rain left much of its crop below the quality.
The market has been nervously watching results from the rain-soaked harvest in France, the EU’s top wheat exporter and the benchmark for prices in western Europe. While quality readings are still emerging, reports so far suggest a large portion of the crop will fail to meet the flour-making standards of its main clients outside the EU, leaving exporters to turn to animal-feed markets within the bloc.
Analyst Strategie Grains on Thursday slashed its forecast for French soft wheat exports outside the EU.
“The downward revision of exportable milling wheat availabilities has led us to cut by nearly 3 million tonnes French exports to traditional milling wheat importing destinations such as Algeria, Yemen and Morocco,” it said.
The main concern has been weak Hagberg falling numbers, a measure of the flour-making quality of wheat and one that is hard to remedy even by blending low quality with superior wheat. Varied results in France have often been well below the 230-240 minimum required by top client Algeria, the 250 sought by Moroccan importers or the 200 set by the state grain buyer in Egypt, the world’s top wheat importer. Quality has already been a headache for exporters of French wheat in recent seasons, with high moisture levels costing it some sales to Egypt and a gradual decline in protein leaving it close to some buyers’ minimum requirements.
This year’s rain-hit crop threatens a much bigger shake-up.
“The milling quality story is not over,” one trade source said. “We have never seen this situation in France.”
France may export only 5 million tonnes outside the EU, compared with 12 million in the 2013/14 season to June 30, and 8-10 million within the EU, the source estimated. Some traders gave a similar outlook for French exports outside the bloc in 2014/15 at 5-6 million tonnes.
Strategie Grains kept non-EU exports slightly ahead of intra-EU sales at 8.8 million tonnes versus 7.2 million.
(Source – http://www.blackseagrain.net/novosti/french-wheat-to-stay-for-eu-export-after-rain)