December 15, 2011


France's wheat export estimate remains unchanged



The wheat exports forecast of France for this season was left unchanged, due to renewed competitiveness on world markets would be offset by lower supply, stated French farm office FranceAgriMer on Wednesday (Dec 14).


The body sees France exporting 8.6 million tonnes of soft wheat outside the EU in the current 2011/12 season, the same figure it gave last month.


A first French sale in months to Egypt's state buyer on Tuesday showed how French wheat had closed the price gap with Russian wheat, but this season's smaller surplus in France would not allow the country to boost shipments in the second half of the July-June season, officials said.


"If we sell more to Egypt we'll sell less elsewhere," Xavier Rousselin, head of FranceAgriMer's grain unit, told reporters. "It will be difficult for us to export more (than 8.6 million tonnes)."


France, the EU's top wheat producer and exporter, shipped five million tonnes of wheat outside the EU between July and the first week of December, meaning exports would slow in the coming months under FranceAgriMer's forecast, he said.


France exported a record 12.9 million tonnes of soft wheat last season but volumes in 2011/12 have been curbed by a smaller harvest and the return of Russia to export markets after a near year-long embargo following a catastrophic drought in 2010.


Russian exports would slow in the months ahead as the country would have to source grain from more inland regions while facing winter disruption to logistics, Rousselin said.


Argentina and also Australia would provide some competition but the impact should be limited.


"I don't think that offers of Argentine wheat towards the Mediterranean rim are going to continue much longer," he said, stressing that Argentina was used to selling wheat quickly to make room in silos for later corn and soy crops.


An expected record crop in Australia could generate more exports but quality problems may limit the country's ability to compete in milling wheat markets.


"The more they export feed wheat the less they will be able to reach markets with demand for bread wheat," he said.

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