France hiked its forecast for carryout wheat inventories to by far the highest in at least a decade as it cut hopes for exports, ditching expectations of shipments outside the European Union beating year-ago levels.
The official FranceAgriMer crop bureau raised by 563,000 tonnes to 5.78m tonnes its forecast for disposable wheat inventories in the EU’s top wheat producer, and exporter, of the grain as of the close of 2015-16.
The upgrade leaves the country looking at historically-elevated inventories, well ahead of the recent high of 3.45m tonnes set in 2008-09.
And it reflected the weaker expectations for exports, with France struggling to find homes amid touch global competition for its large supplies, which were boosted by a record 40.96m-tonne harvest last year.
FranceAgriMer cut by 440,000 tonnes to 7.05m tonnes its estimate for shipments within the EU this year, representing a fall of 11.3% year on year.
The estimate for exports outside the EU was cut by 200,000 tonnes to 11.30m tonnes – taking it below the 11.37m tonnes achieved last season, and indeed representing the weakest figure in three years.
The downgrade comes amid a tough season for wheat exporters, which face enhanced competition thanks to successive strong wheat harvests, with the US Department of Agriculture on Tuesday nudging higher its estimate for output by 450,000 tonnes to a record 735.4m tonnes.
The USDA lifted its estimate for overall EU wheat stocks, including durum, at the close of 2015-16 by 310,000 tonnes to a seven-year high of 19.3m tonnes.
The forecast for EU all-wheat exports was kept at 32.5m tonnes, enough to secure the bloc the title of the world’s top shipper of the grain, but a drop of 2.9m tonnes year on year nonetheless.
US wheat exports, meanwhile, whose competitiveness has been undermined by the strength of the dollar, are on track to fall to a 44-year low of 21.8m tonnes.
France saw its wheat exports within the EU fall by 22% in the first five months of the season, the latest data available, undermined by tougher competition and, for example, a good quality UK harvest which has limited the volumes of milling grain heading north across the Channel.
UK wheat imports of French wheat up to November were, at 59,765 tonnes, down 63% year on year, according to French customs data.
While French merchants have achieved some successes in finding alternative markets outside the EU sending, for instance, 94,134 tonnes to Mexico, on the doorstep of US exporters, while selling their first wheat to Indonesia since 2008-09 overall volumes have proved lower too.
France had shipped 3.32m tonnes of wheat outside the EU as of the end of November, a drop of 6% year on year.
The volumes have been undermined in part by reduced needs in some key markets, such as Morocco, after decent domestic harvests last year.
France’s exports to Morocco as of the end of November were, at 151,063 tonnes, down 51% year on year.
However, strong competition from Russia has also dislodged France from its position gained last season of top supplier to Gasc, the wheat authority for Egypt, the top wheat-importing country.
France’s exports to Egypt during the first five months of 2015-16 were, at 63,000 tonnes, down 88% year on year.