August 1, 2011


French wheat production to exceed 33 million tonnes in 2011-12



More than 33 million tonnes of wheat are to be produced by France in 2011-12, with quality good enough for overseas shipments, according to two economists from France's biggest exporters on Friday (Jun 29).


According to Dow Jones, delayed rainfall has postponed harvests in top producers, thus, causing wheat markets to be on edge in recent weeks. Furthermore, severe drought that took place earlier in the year has also brought about fears that harvests could decrease drastically following France's hottest and driest spring in more than half a century.


However, a chief economist at farming cooperative InVivo, said that currently, the drop in quality has not taken specific weights or Hagberg decreasing numbers into risky range.


Specific weight is the number of grains per hectoliter and importers often use it as a quality criterion whereas Hagberg falling numbers calculate grains' suitability for creating flour. These measurements are vital to decide France's competitiveness as an exporter.


"One can observe some specific weight decrease or Hagberg falling numbers, but not of a large amount," said Luguenot. "If there are more delays it could become dangerous but we expect the harvest to start again next week."


As concerns over Europe's crop intensify, European wheat futures have increased more than 6% in July and the milling wheat premium has jumped to EUR15/tonne (US$22). Farmers have also been unwilling to commit their crops. Dealers also added that German producers have only sold 30-40% of their grains in advance.


However, Russia's entry in the international markets has affected prices as can be seen by US$40/tonne discount given to Egypt, the world's biggest wheat importer.

Another InVivo market analyst said limited stock volumes and greater demand for animal feed are likely to decrease France's non EU exports by 50% to six to seven million tonnes this season.


"We will not export as much as last year even if we import more for feed from the Black Sea," he said, adding that he anticipates massive imports from Ukraine where up to 80% of the harvest could be meagre quality.


But he also argued that France will have excessive good quality wheat to export whereas poor quality will likely go to traditional North African buyers following heavy rainfall this year. Exporters like Invivo will probably revert to traditional markets.


"These destinations will not switch to Russia," he said. "Russian origin is not that reliable."

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