French wheat will be edged out in key North African markets, due to disastrous quality and stiff competition from outside the EU, Andreé Defois, President of the French consultancy Strategie Grains, told Agrimony.
And if prices in Russia fall further, it could open up wheat imports into France, a major net exporter, Ms Defois said.
But despite this year's failed harvest, wheat yields are not expected to fall sharply next year, with farmers confident that the small and low quality crop was a one-off.
This year the French wheat crop suffered from heavy rain and little sunshine.
Last month Strategie Grains saw the French soft wheat crop at 137.9m tonnes, down 9% year on year despite record sowings.
And quality has been severely affected.
Protein levels in French wheat were actually good this year, but test weights, a key measure of quality, were very low.
"Test weight is the limiting factor," said Ms Defois.
"The tighter part of the balance sheet will be good protein wheat with good test weight," Ms
According to FranceAgriMer, the French farm office, the share of the wheat crop with test weights above 76 kilogrammes was just 24%, compared to a five year average of 80%.
Admittedly this level is likely to rise, as producers sort the crop, Ms Defois said. Array
2012-13: 35.24m tonnes
2013-14: 36.87m tonnes
2014-15: 37.47m tonnes
2015-16: 40.91m tonnes
2016-17: 29.9m tonnes*
Source: French Agricultural Ministry, *Stratagie Grains forecast, subject to revision
"Merchants and cooperative are doing a very tough job cleaning and calibrating the volumes of wheat to try and separate out the small grains [to isolate the grains which reach a higher test rate].
"This means that finally the share of wheat in France that is over 76 kilogrammes per hectolitre will be higher."
So will be some supplies of acceptable quality available for export, said Ms Defois. "We are not expecting zero exports."
But even so "France will not be able to match the milling exports from last year," Ms Defois said.
And adding to the woes of French suppliers, is the fact that there is stiff competition from other origins, such Russia and the United States.
"The other origins able to supply North Africa are very competitive," said Ms Defois.
"We are at the point where alternative supplies have already found their way to North Africa.
Algeria, the world's third biggest wheat importer, has long been the bailiwick of French exporters.
"The only buyer in Algeria is the state and they are very strict on quality, they don't want to take a risk," said Ms Defois.
"Algeria until now has been very careful with Russian wheat," she said, noted fears over pest damage.
But the shortfall in French quality wheat means that "this could be one year in which Russia finds a home on Algeria".
Ms Defois said that shipments could give Algerian the opportunity to test Russian wheat.
"If Russian wheat is ok in Algeria, it could be the opening the door [in futures years].
But she said that given France enjoys a significantly cheaper freight rate to Algeria, "it's really a question of price".
"I don't think this year will jeopardise futures exports [if French wheat is competitive]."
The shortfall in milling quality wheat will prompt imports into the EU, Ms Defois said. "We are already expecting a small increase in milling wheat imports from Russia into the EU."
But the price differential will have to increase, if quantities are going to be heavy.
"Russian milling wheat looks quite attractive in ports, but as soon as you add transport costs [it gets too expensive]," she said.
Ms Defois said that EU imports of soft wheat could be around 5m tonnes, compared to the 3m tonnes that were expected before low French wheat yields emerged.
Farm incomes come under pressure
Wheat farmers in France have been hit by a double blow of low yields at a time of very weak global prices. "Farmers are really worried, and are going to have a big loss in their revenues," Ms Defois said.
Bit Ms Defois said that though squeezed budgets might encourage seed saving, it was unlikely to reduce fertilizer usage.
"Farmers will not want to take risks regarding yields."
And farmers are unlikely to make major cuts to wheat sowings in the upcoming campaign, despite one disastrous year.
Ms Defois stressed that the very low yields seen this year were a one off event. "It has never happened is such a dramatic way over the last 30 years," she noted.
"The probability of it happening again is very low."
"The area planted for the 2016 campaign was very high," Ms Defois, saying that some reduction toward average levels to be expected.
"But we are not expecting a big dive," she said.
Andree Defois will be running a Grain & Oilseed working group on Day 2 of the Agri Risk Forum. For more information please see www.agririskforum.com
By William Clarke