France faces its worst wheat exports in decades

France is facing its worst wheat exports in decades as a rift with Algeria, falling demand in China and a poor harvest accelerate the European Union’s top grain producer’s loss of market share to cheaper producers such as Russia, Reuters reported.

The drop in wheat exports is another setback for French farmers, who renewed protests earlier this year over falling incomes and foreign competition. Because they are selling less grain this year, producers are unable to get higher prices as bigger harvests in other parts of the world ensure export markets are well supplied.

Exports could also be a drag on France’s economy after last year’s rain-affected harvest is estimated to have reduced growth by 0.2 percentage points, according to the national statistics office.

This month, agricultural bureau FranceAgriMer maintained its forecast for soft wheat shipments outside the EU for the July-June 2024/25 season at 3.5 million tons, down two-thirds from last season and the lowest volume this century.

With just over 1 million tons shipped in the first half of the season and a less extensive loading program in January, some are more pessimistic.

“It will be a miracle if we reach at least 3 million tons,” said one exporter.

Given falling harvests, Argentina could soon overtake France to become the world’s sixth-largest wheat exporter, with its gap with top suppliers such as Russia, Australia, Canada and the United States widening further.

Modest exports were inevitable after persistent rains led to France’s lowest soft wheat harvest since the 1980s, and patchy crop quality also made access to overseas markets more difficult.

But stiff competition from Eastern Europe, led by russia, and falling demand from Algeria – one of the world’s largest wheat buyers – and China have exacerbated the situation. russia continues to expand its wheat trade despite western financial sanctions over the invasion of Ukraine.

After shipping millions of tons to Algeria and China in recent years, France shipped just one shipment to Algeria and none to China in 2024/25.

Meanwhile, in Morocco, French sales have more than halved.

Senalia, which operates France’s largest grain export terminal in Rouen, has been forced to put some staff on unpaid leave this season due to a weak loading program.

Traders say diplomatic tensions caused by Paris’ recognition of Morocco’s sovereignty over the Western Sahara have led Algeria’s grain agency OAIC to tacitly exclude French wheat and firms from its import tenders since October. OAIC said it treats all suppliers fairly by applying technical requirements.

In France’s two other major overseas markets, China imported less and focused on Australia, while Morocco may import more Russian wheat than French wheat, a dramatic change of direction. The head of Morocco’s grain traders association said France “lacks the necessary volumes to supply our market.”

Export demand could change quickly, and some say French sales could still reach FranceAgriMer’s target as supplies from Russia and Ukraine slow down and Morocco needs to buy more.

But others believe demand will dry up this season and intra-European trade will not offset that demand as cheaper Ukrainian wheat has overtaken French wheat in markets such as Spain.

France has now become a second-tier supplier, and with the loss of its once dominant position in North Africa, it needs to look elsewhere to maintain exports.

Cooperative group InVivo has opened a trading office in Saudi Arabia, while Senalia is exploring the development of import terminals in the Middle East to promote French grain alongside that of other countries in key destinations.

“We may be talking about more diverse export markets with less emphasis on Africa, given the strong presence of russia,” Senalia chairman Didier Verbeke said.

Tags: export, France, wheat