France Faces Historic Decline In Wheat Exports

France’s wheat export market is experiencing unprecedented challenges, signaling alarming trends for the European Union’s dominant grain producer. The country’s wheat exports are projected to decline sharply to about 3.5 million metric tons during the 2024/25 season, severely down from last year and marking the lowest volume this century. Heightened competition from other wheat-producing nations, particularly Russia, and shifting demand dynamics are central to this crisis.

Various factors combine to create the current predicament. Irrational weather patterns had soaked France’s wheat fields with incessant rainfall, resulting in the smallest soft wheat harvest since the 1980s. Farmers, already grappling with reduced incomes due to increased competition and foreign imports, are now faced with another setback as their yields dwindle. The French National Statistics Office also suggested these harvests have contributed to shaving off 0.2 percentage points from the country’s overall economic growth, compelling many farmers to protest earlier this year. These protests arose from concerns over plummeting incomes and intensified foreign competition, leaving many growers wondering how to sustain their livelihoods when they have sold less grain this year.

Influenced by fluctuated market dynamics, Algeria, one of the world’s largest wheat buyers, has drastically slowed its purchases from France. Meanwhile, Chinese demand has similarly waned. While Algeria previously imported significant quantities from France, the Algerian grains agency OAIC has allegedly excluded French wheat from its import tenders after diplomatic tensions escalated following Paris’ recognition of Morocco’s sovereignty over Western Sahara. According to Benoit Pietrement, who chairs FranceAgriMer’s grain committee, “It’s a complete blackout with Algeria,” reflecting the growing frustrations among French traders.

Compounding this issue is the surge of cheaper wheat imports from Eastern Europe, especially Russia, which continues to thrive even amid Western sanctions over its invasion of Ukraine. This development has caused prices to remain competitive, exacerbated by France’s reduced capabilities to fulfill export demands due to its poor harvest. An export trader opined, “It will be a miracle if we even get to 3 million tons,” illustrating just how dire the forecast appears. So far this season, France has shipped slightly over 1 million tons, with many skeptical about achieving the stated targets for the year.

Nonetheless, all is not bleak. Despite dwindling exports outside the EU, Morocco’s sales from France have more than doubled. Yet even then, the head of Morocco’s grain traders’ association indicated France “lacks the needed quantities” to meet their needs amid swiftly shifting market demands. This has forced French traders to reconsider their strategies, with some now eyeing markets beyond North Africa.

Senalia, which operates France’s largest grain export terminal located at Rouen, has reportedly laid off some employees this season as the thin loading program signifies the broader industry outlook. Certain traders predict potential growth areas may exist if circumstances shift favourably. Concerns linger about long-term demand; if wheat exports from Russia and Ukraine are disrupted, some speculate opportunities still exist for French presence.

To mitigate these challenges, it appears French trading cooperatives and exporters are gearing up to explore new markets and revenue channels. Recently, the cooperative group, whose reach includes the prominent trading branch, has set its sight on Saudi Arabia, aiming to establish terminals capable of promoting French wheat alongside alternatives from other origins. Didier Verbeke, Senalia’s chairman, emphasized the necessity for diversified outlets, saying, “It could be a case of having more diverse export outlets, with less focus on Africa, like Russia’s active presence.” This strategy may encourage flexibility and adaptability that’s required to thrive amid the rapidly shifting global agricultural economy.

Despite the challenges faced, the resilience of farmers and exporters remains noteworthy as they navigate these turbulent waters. While the central issue persists—an underperforming harvest compounded by geopolitical tensions—it is the hope of many within the industry to recover and regain previous standing, especially when market conditions shift. With careful planning and strategic pivots, France may once again reclaim more favorable trade relationships, emphasizing the importance of vigilance amid the competitive global wheat export arena.

Tags: yields, imports, soft wheat, export, France, wheat