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momagri, movement for a world agricultural organization, is a think tank chaired by Christian Pèes.
It brings together, managers from the agricultural world and important people from external perspectives,
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of agricultural markets by creating new evaluation tools, such as economic models and indicators,
and by drawing up proposals for an agricultural and international food policy.
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  Editorial  
 

WORLD WHEAT EXPORTS: A 20 million-ton market out of France’s reach



Frédéric Hénin, Editor in Chief, Terre-net


Article published in Terre-net Média



Regardless of the criteria used, French wheat is increasingly unable to meet the requirements of importing countries. Today, the diversity of resources and ready supply on global markets are adding to the problems.

Quantity does not mean quality! The carryover stocks of French wheat at the end of the crop could reach four million tons (MT), against less than two MT for the previous years! At issue is the 40 percent of intermediate grade wheat, out of the 37 MT collected, that is in direct export competition with ordinary category grain from third countries! Offering a better value for the money, it is shipped to the Middle East, the Maghreb and sub-Saharan Africa, where France was exporting most of its output only a few years ago.

French wheat is increasingly unable to meet the criteria to be marketable. And the more time passes, the more the competitiveness gap with other major grain exporting nations will widen, if French producers do not react.

In fact, as the supply of foreign wheat becomes better, importers seek to raise the required standard norms! In Egypt, Russian wheat with a 12.5 percent protein content is now considered as the reference.

As a result, the February 5, 2015 agreement within the trade on the new classification of French soft wheat is particularly timely. Yet, the “Premium” category––including wheat with a protein rate over 11.5 percent and endowed with a baking quality over 170 and a Hagberg falling number higher than 240––barely matches the norms required by most wheat importing countries.

“France delivers wheat categories that comply with clients’ minimal specifications, when its competitors pro-actively deliver more!” lamented Yan Lebeau and Roland Guiragossian from France Export Céréales on March 11, when speaking at the seminar on “French wheat exporting, the view from our clients” presented by the organization.


MINNIMUM LEVELS OF DELIVERIES

Egypt and Algeria––the world’s two largest wheat importers––do not have the resources to improve imported grain with additives. The two Mediterranean nations and their neighbors need multi-purpose wheat to meet the criteria of artisanal bread making as well as those from industrial bakeries and the biscuit industries.

As a result, “some specifications by importing countries represent genuine barriers to the entry of French wheat,” explains Yann Lebeau. A market of over 19 million tons (MT) of wheat exports to the Middle East is out of France’s reach. Because the specifications of these countries’ public purchasing authorities demand that grains have a protein content of at least 12 percent to be competitive.

In Morocco, between 20 to 30 percent of the wheat used for flour production comes from Germany, Russia or the United States, since its protein rate is higher than 12 percent, against 10.5 percent for imported French wheat.

The rate of wet gluten lower than 23 percent for French wheat further explains our country’s problems to sell grain, since the required norms are at least 25 percent. Because of this simple criterion, close to 16 MT of wheat are imported from countries that are more competitive than France.


COMPETITION HEIGHTENED BY OVERABUNDANT SUPPLY

Due to the combined protein and wet gluten shortfalls, over 20 million tons of wheat are sold by France’s competing countries.

The Hagberg falling number below 220 and humidity rates that are too high are also making French wheat difficult to export.

Confronted to this year’s overabundant supply, it is a fact that the quality of exportable wheat is particularly relevant. Currency devaluations, declining oil prices, lower transportation costs and corn prices are reinforcing the straw grain competition with major producers, even with nations that are the furthest from the Mediterranean Basin. Hence France’s difficulties, although it is geographically best situated. The country’s wheat sales to Morocco and Algeria have been halved.

As a result, it is by gaining market shares in Asia––where France was not active until now––that the country can find an outlet for a share of its mid-quality crops. Yet this year, these sales are not adequate to make up for losses suffered in traditional markets


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Paris, 10 December 2018