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France lifts export hopes, and cuts stocks forecast, as demand from EU buyers grows

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FranceAgriMer lifted its forecast for French wheat exports within the European Union to the highest in 12 years, even as it trimmed expectations for shipments into the competitive world market.

 

The official French agriculture bureau raised by 530,000 tonnes to 8.61m tonnes its forecast for the country’s soft wheat shipments within the bloc.

 

Exports at that level would be the strongest intra-EU performance since the 9.29m tonnes shipped in 2005-06, and represent a 38% improvement on the total last season, when French shipments were badly undermined by a rain-hurt harvest.

 

However, Wednesday’s upgrade follows an uptick in the performance of French wheat exports within the EU, with latest official data, for November, coming in at 712,238 tonnes, a rise of 7.7 month on month.

 

Over the July-to-November period, the first five months of the 2017-18 wheat marketing year, French exports within the bloc reached 3.36m tonnes, a jump of 67% year on year.

 

Quality factor

 

The expansion reflects a shift in weather woes to other major EU wheat-growing countries last year, when the likes of Germany and Poland, as well as the UK, suffered crop damage from untimely rains.

 

Harvest-time inundations prompted damage in particular to wheat quality in some major growing areas, prompting a switch by some buyers to French supplies, which came in with relatively strong specifications.

 

Indeed, France in the July-to-November period exported 181,655 tonnes of soft wheat to Germany itself, more than treble the volume for the same period of last season.

 

Exports to the UK, at 103,288 tonnes, near-doubled.

 

France vs Russia

 

By contrast, French exports outside the EU, despite a sharp pick-up in November to 730,439 tonnes, have staged a more modest recovery from their depressed levels of 2016-17.

 

For the July-to-November period, shipments outside the bloc reached 2.76m tonnes, growth of 34%.

 

While France has seen a revival in demand from traditional export strongholds such as Algeria and Morocco, orders to many other African countries – including, notably, top importer Egypt – have declined in the face of mounting competition from Russia.

 

Russia’s huge export prospects, after a record 2017 harvest, were underlined on Tuesday by SovEcon, which said that the country had already shipped some 21m tonnes of wheat, including durum, so far this season, a rise of 34% year on year.

 

“Despite winter time Russia continues to export at the record pace,” Moscow-based SovEcon said, noting a boost to volumes from “stagnating” domestic prices and relatively warm winter weather.

“Our [Russian wheat export] forecast of 35.5m tonnes for the current season starts to look a bit conservative.”

 

Still below average

 

FranceAgriMer trimmed its forecast for French soft wheat exports outside the EU by 200,000 tonnes to 9.30m tonnes.

 

While representing a marked improvement on the 4.97m shipped last season, after the poor 2016 French harvest, the latest forecast remains well below the average pace, of 10.9m tonnes for the five seasons from 2011-12 to 2015-16.

 

Nonetheless, the overall impact of the revisions was an upgrade above 18m tonnes in expectations for overall soft wheat exports this season.

 

And this was reflected in a 365,000-tonne reduction in the forecast for French soft wheat stocks at the close of 2017-18 – meaning inventories are now seen shrinking over the season, rather than growing by some 200,000 tonnes as had been previously expected.

 

Indeed, the 2.88m tonnes at which stocks are now seen ending this season would be the lowest carryout in three years.

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