France upgraded, again, its forecast for soft wheat exports, thanks to better hopes for shipments outside the European Union, after a series of Egyptian orders which, given last year’s poor quality harvest, have surprised many traders.
FranceAgriMer, the French crop bureau, lifted by 300,000 tonnes to 8.80m tonnes its forecast for the country’s soft wheat exports outside the EU in 2014-15.
The figure still represents a sharp decline on the 12.22m tonnes shipped by France, the EU’s top wheat producer and exporter, outside the bloc in last season, with the expected decline a reflection of a poor quality harvest last year, thanks to harvest-time rains which encouraged ripe kernels to sprout, lowering their milling specifications.
However, Wednesday’s upgrade left FranceAgriMer notably less gloomy on export prospects than four months ago when, in its first forecast for shipments outside the EU, it pegged them at 8.0m tonnes.
Quest for new markets
Indeed, the FranceAgriMer estimates foresee that France’s wheat exports outside the EU will, over the rest of 2014-15, return to their usual position of exceeding shipments within the bloc.
Exports to destinations inside and outside the bloc were, as of November, running neck and neck, at 3.5m tonnes each.
FranceAgriMer had initially expected that other EU countries would take the majority of French wheat exports, including to feed markets such as Spain, as the poor quality of the 2014 crop drove more discerning milling wheat importers to alternative origins.
However, while shipments to Algeria, which has particularly high specifications, indeed tumbled 47% in the season to November, French merchants have searched afar to find alternative buyers, such as South Korea, which is expected in 2014-15 to import its biggest volume of French feed wheat in 26 years.
‘Getting its act together’
Furthermore, France has had notable success winning milling wheat orders from Egypt’s Gasc grain authority, which enforces lower quality hurdles than some other buyers.
Gasc has so far in 2014-15 ordered 1.32m tonnes of French wheat, out of a total of 3.09m tonnes bought at tender – and more than twice what it bought from France in the whole of last season.
Nonetheless, “after poorer quality harvests this year, traders are wondering just how much more wheat of the required quality France, and Romania, can supply,” traders at a major European commodities house said.
“Certainly, France seems to be getting its act together in terms of blending up to the required standard, helped by the large premium over feed wheat.”
Milling premiums are being supported both by the disappointing quality of harvests in France and Romania, as well as the likes of Canada and Ukraine, and by the dent to feed wheat prices from record world corn production.
(Source – http://www.agrimoney.com/news/france-lifts-wheat-export-hopes-again-after-egyptian-orders–7862.html)