The strong demand for French wheat by other EU Member States should help to compensate for falling sales with third countries, although the French rail strike is likely to hinder exports until the end of the season. That informed FranceAgriMer today.
France, Europe's largest cereal producer, is facing particularly fierce competition this season, mainly by Russia. By contrast, demand from EU neighboring countries is very strong; especially from Spain, where there was a bad grain crop last year.
The price advantage of wheat over barley or corn when used in feed rations contributes to better wheat demand in the EU. FranceAgriMer raised its estimate for French wheat exports to EU countries by 400,000 tonnes to 8.9 million tonnes. This is more than exports to third countries, which are now expected at 8.3 million tonnes.
Intra-EU trade is thus at a historically high level. These exports will be supplemented by another 150,000 tonnes, which will be used by domestic feed producers. As a result, FranceAgriMer has lowered its final inventory estimate to 2.7 million tonnes as at 30.06.2018.In March, the estimate was still at 3.2 million tonnes.
Strong demand from Algeria and Morocco, despite being hampered by a national rail strike, ensures that the export target, which has been steadily revised downwards for six months, has been reached. Logistical problems due to the strike have raised premiums in some regions.
Text: HANSA Derivatives Trading GmbH / - FranceAgriMer
