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French wheat exports fall due to poor crop, Algerian spat and Russian rivalry

Posted to Maritime Reporter on January 27, 2025

France is facing its worst wheat exports for decades due to a rift between Algeria and the European Union, a slump in Chinese demand, as well as a poor harvest.

The French farmers who protested in the beginning of this year against falling incomes and foreign competition are now facing another setback. The French farmers are not getting higher prices because they have sold less grain in this year. This is due to the large harvests around the world that keep export markets well-supplied.

The French economy could be affected by exports as well, after the National Statistics Office estimated that last year's wet harvests had shaved off 0.2 percentage points of growth.

The farm office FranceAgriMer has maintained its forecast of shipments of soft white wheat outside the EU for the July-June 2024/25 season, at 3.5 millions metric tons. This is down by two-thirds compared to last year and the lowest volume in this century.

Some are pessimistic, with just over 1,000,000 tons of cargo shipped in the first six months and a sparse load programme for January.

One export trader stated that it would be a miracle to reach 3 million tons.

France's gap with other leading wheat exporters such as Russia and Australia will continue to grow as a result of the falling harvests.

The French soft wheat harvest was the smallest since the 1980s due to incessant rainfall. Mixed crop quality also made it difficult to access overseas markets.

Algeria, one of the largest wheat-buyers in the world, has slowed down its demand, while China, another major buyer, is also fading. Russia is continuing to increase wheat trade in spite of Western financial sanctions for its invasion of Ukraine.

France, which in the past sent millions of tons of goods to China and Algeria, has only shipped one shipment in 2024/25 to Algeria.

The French sales in Morocco have meanwhile more than doubled.

Senalia, the company that operates France's biggest grain export terminal in Rouen, was forced to lay off some employees this season because of a thin loading program.

Traders claim that diplomatic tensions sparked by Paris' recognition of Morocco's sovereignty in Western Sahara have caused Algerian grains agency OAIC, since October, to exclude French wheat and companies from its import tenders. OAIC says it applies technical requirements to all suppliers and treats them fairly.

Benoit Pietrement is a farmer who heads FranceAgriMer’s grain committee.

Morocco, China's other major overseas market, may import more Russian than French wheat in a sudden shift. Morocco's grain trader's association head has stated that France "lacks the needed quantities" to supply its market.

Some say that export demand can change quickly, and that France could still reach FranceAgriMer’s target, despite Russian and Ukrainian shipments slowing down and Morocco needing more.

Others see the demand for French wheat as running out this season. However, intra-EU trade has not compensated because Ukrainian wheat is cheaper and has overtaken French on markets such as Spain.

France is now a second tier supplier, and it must look to other countries to maintain exports.

InVivo, a cooperative group, has opened a trading branch in Saudi Arabia. Senalia is examining how to create import terminals for French grain in the Middle East in order to promote it alongside other origins at key destinations.

Didier Verbeke said that Senalia chairman. "It may be possible to have more diverse export outlets and less focus on Africa, given Russia's active participation."

(source: Reuters)

Tags: Transportation Asia East Asia North Asia South America North Africa

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