EU wheat exports surge, record French shipments expected

• The EU Commission this week raised its monthly forecast for exports of soft wheat, or common wheat, from the EU plus Britain to 31.8 million tonnes, a four-year high.

HAMBURG/PARIS: European Union wheat exporters are set to record their best export season for years with record shipments expected from top exporter France, traders said on Wednesday.

For the current July 2019/June 2020 season, the EU Commission this week raised its monthly forecast for exports of soft wheat, or common wheat, from the EU plus Britain to 31.8 million tonnes, a four-year high.

France has benefited from new demand from China while less intense competition from Russia helped traders shift a large 2019 French crop.

Germany has achieved major sales to Iran and Africa, while shipments from Romania, Bulgaria, Poland and the Baltic States have also boomed.

"The debate about possible export restrictions in Russia and elsewhere in the Black Sea may make exporters more cautious about selling wheat from these countries for the coming weeks before new Black Sea harvests start," one European trader said.

"But available export supplies in Germany and the Baltic region are looking pretty tight after recent export sales," the trader added.

Expectations of stronger demand as the export season ends have subsided after top wheat supplier Russia allowed grain to be shipped abroad beyond the export quota.

France was seen as well placed to add any last-minute demand for lower-protein wheat to its already high shipments.

Farm agency FranceAgriMer has forecast French soft wheat exports outside the EU in 2019/20 at 13.2 million tonnes, above the record 12.9 million shipped in 2010/11 during an export ban by Russia.

French exports have surged to meet demand from core customers, such as Algeria and Morocco, alongside newer customer China.

France has shipped 1.3 million tonnes of soft wheat to China so far in 2019/20 and trade estimates range from 1.5 million-1.7 million tonnes for the full-season volume.

China has bought unprecedented volumes from Baltic States, which have shipped about 600,000 tonnes to the Asian nation.

But end of season demand from importers has eased following the coronavirus crisis.

"The big wheat importing countries in the Middle East and Africa are reeling from the collapse in oil prices and the tourism stop," another trader said.

"These countries face a fall in incomes which is frankly incredible. In the short term, they may be forced to make only essential spending, even on grains," the trader added.

Dealers were waiting to see if Egypt's state grains buyer GASC issued a new purchase tender despite economic uncertainty.

"French wheat is very competitively priced for old crop but there is isn't much additional demand around except a bit in West Africa," one European analyst said. "Only a new GASC tender could shake things up in my view."