A plunge in wheat production and uncertain crop quality in France could sideline the European Union's top exporter from some overseas markets and push down overall EU wheat exports. Yet within the EU, Romania and Bulgaria should benefit from bumper harvests, while Germany and Poland could win sales from France if rain does not spoil their crops, suggesting more exports will come from east of the bloc, analysts and traders say.
After a record EU harvest last year, damaging spring weather is set to cause a dramatic drop in harvest output in France and curb yields elsewhere in western Europe. Wheat quality, crucial for export markets, could also be eroded. The European Commission currently projects EU soft wheat exports of 29 million tonnes in 2016/17, down from 32.4 million last season, although its crop estimate is well above some private forecasts.
"You're going to have a clear fall in EU production which you have to set against a good crop in the Black Sea region," said Pierre Begoc of consultancy Agritel. "Less supply in France will mean lower sales from there, which means in turn some musical chairs in export markets." France exported 12.6 million tonnes of soft wheat outside the EU last season. Traders say it could struggle to reach half that this season and send more wheat within the EU.
The weather-ravaged French harvest has fuelled talk that Romanian wheat could be imported soon, in what would symbolise the changed outlook for the new season. Romanian wheat has contributed to higher volumes of EU export licences so far 2016/17 than in the past two campaigns. "With a huge harvest arriving in Russia it looks like Russia will win a lot of price-sensitive export sales to buyers like Egypt, along with other Black Sea suppliers like Ukraine, Romania and Bulgaria," one trader said.
France's reduced role could also shift sales to other EU countries in its main export market, Algeria. "Germany, Poland and the Baltic States are likely to win customers with specific quality demands such as Algeria, which does not want Black Sea supplies. But the late rain falling on German and Polish grains means we just do not currently know what the harvest quality will be." Export trends, however, are always hard to call as demand fluctuates. Last season, the EU recovered from a slow start to almost match record exports from 2014/15
And traders see scope for France to adapt. With this year's harvest quality problems are centred on specific weights, which can be improved at a cost by sorting grain. If France struggles to muster enough milling-grade wheat, it may still target animal feed markets. "France will have feed wheat to export and is likely to expand its new sales into Asia," another trader said.