French wheat shipments to hit record in July

: Agriculture
22/07/19

French wheat exports in July are on track to hit their highest for the month, as poor domestic harvest in key importers of the Middle East and north Africa paired with competitive prices of crop globally have boosted trade interest.

French wheat shipments to non-EU destinations so far this month totalled 511,200t, according to preliminary line-up data. This would be up from monthly volumes exported globally in 2020 and 2021, when 461,000t and 227,000t of crop were shipped, respectively.

And with an additional 118,300t scheduled to be shipped to non-EU countries until the start of next week, wheat exports could rise to 629,500t and may reach 800,000t by the end of the month, according to market estimates. This would put monthly volumes above the previous record from 2010-11, when 775,000t of crop were exported.

Exports this month are largely supported by Morocco, with a combined 324,400t scheduled to have been shipped to the destination earlier this month. This is considerably above volumes exported to Morocco in July in previous years, with monthly shipments peaking at just 37,400t in 2016. This is as the Moroccan government traditionally lifts import duties on wheat in the first months of the marketing season to protect domestic harvest of crop. But a poor domestic output — estimated at a 15-year low of 2.25mn t, according to the US Department of Agriculture — prompted the government not to introduce higher import taxes this year.

A 30,000t cargo was scheduled to be shipped for Israel on 18 July, which marks the first receipt of French wheat since February. Israel primarily imports wheat from the Black Sea region but has started to explore alternative origins at a time of disruptions to Ukrainian shipments following the start of the Russian invasion.

French wheat has gained competitiveness internationally in the past weeks, extending sharper losses than in the wider Black Sea region and turning to a discount to most key origins on a fob basis, except for US soft red wheat. But France's freight advantage over the US in north Africa means French wheat is the most competitively priced crop for delivery into the region.

France is anticipated to export 10.75mn t of wheat globally in 2022-23, under the estimates of Argus' agricultural advisory arm, Agritel, up from about 8.8mn t shipped last year. In comparison, France's agricultural and sea products agency FranceAgriMer projects the nation's non-EU wheat exports to reach 10.3mn t this season.

By Bilal Muftuoglu

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