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Supply Chain

French Wheat Export Forecast Cut Again As High Prices Curb Demand

Farm office FranceAgriMer lowered its forecast for French soft wheat exports outside the European Union this season for a third month in a row, saying high prices due to the war in Ukraine had curbed international demand.

French soft wheat exports to non-EU destinations in the 2021/22 season that ends on 30 June are now expected at 9.1 million tonnes, down from 9.25 million projected in May, FranceAgriMer said in a cereal supply and demand update.

European wheat futures surged to a record high following Russia's invasion of Ukraine, which has blocked millions of tonnes of grain. Prices have fallen back but remain nearly double their level a year ago.

"We have prices that are competitive but which remain dissuasive for buyers," Marc Zribi, head of FranceAgriMer's grains unit, said of French exports.

Morocco, whose harvest was hit by drought, was proving an exception with steady demand for French wheat, he told reporters.

Soft Wheat Exports

Analyst firm Strategie Grains reduced its forecast for EU soft wheat exports sharply on Thursday, also citing a drag on demand from elevated prices.

Traders nonetheless expect EU wheat to be in strong demand in the upcoming 2022/23 season, with availability of Ukrainian supplies uncertain despite talks to re-open the country's ports.

FranceAgriMer kept its forecast of French soft wheat exports within the 27-country EU unchanged at 8.0 million tonnes.

It also held its projection for French soft wheat stocks at the end of the season steady at 3.2 million tonnes, with the reduced outlook for non-EU exports offset by a downward revision to harvest supply.

Summer Harvest Outlook

For this summer's harvest, showers and cooler temperatures in recent days have brought relief for crops after a dry spring, and damage from storms last weekend was thought to be very localised, Catherine Cauchard, head of FranceAgriMer's crop monitoring service, said.

Forecast maize (corn) stocks in 2021/22 were increased to 2.6 million tonnes from 2.2 million as the office revised up supply and lowered projected demand for livestock feed.

France's worst-ever bird flu outbreak and wider difficulties in the livestock sector have reduced feed demand.

Projected barley stocks were raised to 1.4 million tonnes from 1.3 million last month, reflecting cuts to expected exports and feed demand, FranceAgriMer's data showed.

News by Reuters, edited by Checkout. For more Supply Chain stories, click here. Click subscribe to sign up for the Checkout print edition.

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