PARIS/HAMBURG: Chinese buyers are thought to have booked at least half a million tonnes from the next French wheat harvest, as China looks widely to cover grain import needs heightened by a domestic corn deficit, traders said.
The sales were believed to be the first confirmed deals involving the 2021 crop and suggest China will remain a major outlet for French wheat for a third consecutive season.
One of the few European origins accepted by China, French wheat has benefited in the last two years from fluctuating trade relations between Beijing and other suppliers, such as the United States and Canada, and more recently a push by China to replenish feed grain supplies.
The new sales were for shipment between July and September, traders said.
Some sources estimated the volume at 500,000 to 600,000 tonnes, or up to around 10 large panamax vessels, mainly for August. Others pegged total sales higher, at around 1 million tonnes, suggesting France could load up to about 15 panamaxes this summer.
The wheat was thought to have been booked to French milling wheat specifications, with 11.5% protein content, but at least part of the volume was expected to be used in animal feed, traders said.
Wheat can be used as an alternative to corn in feed and because it is high in protein, it can reduce the need to add protein-rich ingredients, such as soymeal.
“The Chinese have returned about a month earlier than last year as buyers in Europe,” one German trader said.
“Wheat is looking about $20 a tonne cheaper than corn on a landed China wheat basis. So wheat from Europe and North America is looking attractive.”
France has shipped about 1.6 million tonnes of wheat to China so far in the 2020/21 season that ends on June 30, in line with the volume shipped over 2019/20.
Chinese demand has offered an outlet for the European Union’s largest wheat supplier as it faces strong competition from Russia in the Middle East and from other EU origins in Algeria, France’s main export market.
The French industry has been promoting its wheat as suitable for Chinese millers. However, Chinese buyers have traditionally turned to countries like Canada and Australia for bread and biscuit wheat, and state-owned group COFCO has called on France to develop higher-quality milling wheat.
Traders said a large part of the sales of 2021 harvest French supplies were thought to have been made earlier this month, before a rally that has taken new-crop wheat futures on Euronext to contract highs.