By Gus Trompiz
PARIS (Reuters) – France faces its worst wheat exports in decades as a rift with Algeria, a lull in Chinese demand and a dire harvest accelerate a loss of market share for the European Union’s top grain grower to cheaper producers like Russia.
Shrinking wheat exports are another setback for French farmers, who resumed protests early this year over falling income and foreign competition. As they sell less grain this year, growers are failing to get higher prices as large harvests elsewhere in the world keep export markets well supplied.
Exports could also be a drag on France’s economy after last year’s rain-hit harvests were estimated to have shaved 0.2 points off growth, according to the national statistics office.
Farm office FranceAgriMer this month maintained its forecast for shipments of soft wheat outside the EU in the 2024/25 July-June season at 3.5 million metric tons, down two-thirds from last season and the smallest volume this century.
With just over 1 million tons shipped in the first half of the season and a sparse loading programme for January, some are more pessimistic.
“It will be a miracle if we even get to 3 million tons,” one export trader said.
Given falling harvests, France may soon be overtaken by Argentina as the world’s sixth-largest wheat exporter and its gap with leading shippers such as Russia, Australia, Canada and the United States is set to widen further.
Modest exports had been inevitable after incessant rain led to the smallest French soft wheat harvest since the 1980s, with mixed crop quality also complicating access to overseas markets.
But stiff competition from Eastern Europe, led by Russia, and fading demand from Algeria – one of the world’s largest wheat buyers – and China have exacerbated the situation. Russia continues to expand wheat trade despite Western financial sanctions over its invasion of Ukraine.
After shipping millions of tons to both Algeria and China in recent years, France has sent just one shipment to Algeria and none to China so far in 2024/25.
In Morocco, meanwhile, French sales have more than halved.
Senalia, which operates France’s largest grain export terminal at Rouen, has been forced to furlough some staff this season due to the thin loading programme.
Traders say diplomatic tensions, sparked by Paris recognising Morocco’s sovereignty over Western Sahara, have led Algerian grains agency OAIC to tacitly exclude French wheat and firms in its import tenders since October. OAIC has said it treats all suppliers fairly, applying technical requirements.
“It’s a complete blackout with Algeria,” Benoit Pietrement, a farmer and head of FranceAgriMer’s grain committee, said.
In France’s two other big overseas markets, China has imported less and focused on Australia, while Morocco may import more Russian wheat than French in an abrupt shift. The head of Morocco’s grain traders’ association has said France “lacks needed quantities to supply our market”.
Export demand can turn quickly and some say French sales could still hit FranceAgriMer’s target, with Russian and Ukrainian shipments slowing and Morocco needing to buy more.
But others see demand running out for this season, while intra-EU trade is not compensating because cheaper Ukrainian wheat has overtaken French in markets like Spain.
France has now become a second-tier supplier and with the loss of once-dominant positions in North Africa it needs to look elsewhere to sustain exports.
Cooperative group InVivo has opened a trading office in Saudi Arabia, while Senalia is looking at how to develop import terminals in the Middle East to promote French grain alongside other origins in key destinations.
“It could be a case of having more diverse export outlets, with less focus on Africa given Russia’s active presence,” Didier Verbeke, Senalia’s chairman, said.
(Reporting by Gus Trompiz, additional reporting by Gleb Stolyarov; Editing by Emelia Sithole-Matarise)
