PRINTABLE VERSION   EMAIL TO A FRIEND   RSS FEEDS 17:55 UK, 11th Dec 2013, by Agrimoney.com
Egyptian order underpins French wheat export hopes

French wheat underlined its international competitiveness at a tender by Egyptian grain authorities, boosting hopes of meeting an export forecast upgraded earlier in the day by FranceAgriMer.

FranceAgriMer, the French crop bureau, on Wednesday lifted by 600,000 tonnes to an elevated 11.8m tonnes its forecast for the country's wheat shipments outside the European Union in 2013-14.

A figure at that level would represent a 19.1% rise year on year, and beat even more convincingly shipments of 8.52m tonnes outside the EU in 2011-12.

However, an upgrade was supported by the strong volumes so far this season, estimated at 4.7m tonnes to countries outside the EU, and the potential for logistical hiccups, prompted by the scale of Canada's record harvest, hampering North American competition.

"January and February will be crucial months to reach this [11.8m-tonne] target," said Olivia Le Lamer, the head of the grain unit at FranceAgriMer.

Egypt buys

The comments came hours before French wheat scooped 120,000 tonnes of a 300,000-tonne order by Gasc, the grain agency for Egypt, the world's top wheat importing country.

The rest of the order, which took Gasc's purchases this season nearly to 3m tonnes, was won by Romania.

However, Romania relied on its cheaper shipping costs to Egypt than from France, by $12 a tonne or so, to win the deal, for shipment January 10-20.

Excluding shipping French supplies, offered as low as $294.67 a tonne, were broadly lower priced than Romanian, for which the cheapest offer was for $295.96 a tonne.

US competitiveness

Along with German wheat, offered to Gasc at $304 a tonne, only three origins were represented at the tender.

FranceAgriMer estimates for French wheat 2013-14, change on last and (year on year)

Area: 4.978m hectares, -1,000 hectares, (+117,000 hectares)

Yield: 7.40 tonnes per hectare, -0.2 tonnes per ha, (+0.7 tonnes per ha)

Harvest: 33.516m tonnes, -32,000 tonnes, (+871,000 tonnes)

Domestic use: 14.725m tonnes, -225,000 tonnes, (-15,000 tonnes)

Grain exports inside EU: 7.03m tonnes, +90,000 tonnes, (-145,000 tonnes)

Exports outside EU: 11.8m tonnes, +600,000 tonnes, (+1.89m tonnes)

No offers were made of Russian not Ukrainian supplies, nor of Canadian supplies, even after a harvest upgraded last week to a record 37.5m tonnes, not of US wheat, which has featured on previous Gasc bid lists this season.

It can be tricky for North American wheat to beat rival Black Sea or European offers to win Egyptian business, given the extra shipping costs across the Atlantic.

Separately on Wednesday, Rabobank highlighted the boost to US trade across the Pacific from an enlarged Panama Canal, which would cut by 12% the cost of transporting grain from the Corn Belt a major grower of soft red winter wheat to Asia, via Gulf of Mexico ports.

"The Panama Canal expansion is great news for American competitiveness," Rabobank analyst Will Sawyer said, adding that it could begin to reverse the decline in Gulf ports' take of US grain shipments, which has fallen from nearly 80% to some 60-65% over the last decade as the growth of Asian demand has increased the use of Pacific North West facilities.

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