EU wheat exporters suffer as buyers opt for cheaper international deals

INTERNATIONAL buyers are abandoning European grain for cheaper suppliers such as the US, leading European agriculture market analysts say.

The EU has experienced a two-week slowdown in exports of wheat and other grains, primarily due to price competition. Wheat prices more than doubled in the past 12 months in Paris trading, exceeding the 36% increase in Chicago prices.

Egypt, the world’s largest wheat importer, opted for US and Argentine grain at a tender on December 28, having twice bought from France earlier in the month. Paris-traded wheat climbed 6.1% between the latest purchase and the prior tender on December 15, more than the 4.4% gain in Chicago.

France is the largest grain producer in the EU. French farmers are already producing far less grain in anticipation of falling demand. French grain market specialist, FranceAgriMer, predicts wheat stockpiles in France will fall to 2.15 million tons when the crop year ends this June, a decline of 37% from a year earlier.

The EU licensed 72,000 metric tons of soft wheat for export in the latest week, figures showed on January 6, the least since January 2008. That was a 62% plunge from the prior week, when licenses slid 41%. Export licenses in all of December were less than the record 1.03 million tons for a single week in September.

EU soft-wheat export licenses in the crop year, which started on July 1, totalled 11.2 million tons as of the latest week, up 26% from a year earlier.