November 18, 2024

EU wheat exports shift to West Africa amid Russian competition

European Union (EU) wheat exporters are increasingly targeting West African markets, as competition from Russia has diminished their presence in traditional North African and Middle Eastern markets, traders reported.

EU shipments of soft wheat for the 2024/25 season are 30% lower than the same period last year. This decline is attributed to Russia's dominance in the market and a rain-affected harvest in France, the EU's largest wheat producer. Nigeria has emerged as the top destination for EU wheat exports, while Algeria, previously the leading market, has fallen to fifth place, according to EU data.

Baltic states have pivoted sharply towards African markets. Karolis Simas, president of the Lithuanian grain processors and traders association, highlighted that 75% of wheat exports from Baltic countries are now directed to Africa. Nigeria and South Africa have become primary destinations, replacing former key markets like Iran and Saudi Arabia, which are now dominated by Russian suppliers, Simas said at the Global Grain conference in Geneva.

Poland has also shifted its export focus. Norbert Sztloc, commercial head of grain and oilseeds at Polish Agro, explained that the country previously sent around half its wheat exports to Saudi Arabia in large panamax vessels. Now, its main outlet is West Africa, with shipments relying on smaller vessels, he noted.

France has similarly seen a decline in its wheat exports to Algeria. On Wednesday, FranceAgriMer, the national farm office, reduced its forecast for French soft wheat exports in 2024/25, predicting a 62% drop compared to last year. In response, both France and Germany have redirected exports to Morocco, though Russia's increased presence in the Moroccan market has limited EU gains there, pushing Morocco to become only the fourth-largest destination for EU wheat.

Despite these challenges, traders see potential for EU wheat exports to recover. Russia's moves to regulate its exports and declining Ukrainian supplies could create opportunities for EU exporters. Poland, for example, is expected to increase shipments from March as farmers release stockpiles, with an additional 2 million tonnes of exports needed to meet targets after a slow start to the season, Sztloc said.

-      Reuters