French wheat cargoes for China delayed in export setback

Several cargoes of French wheat that had been due to load for China in December have been postponed to March, dampening hopes of an imminent upturn in exports and helping push prices to two-year lows.

Chinese buyers are thought to have booked around 2-2.5 million metric tons of French wheat in recent months for shipment between December and March, a welcome flurry of sales for France that has faced stiff export competition from cheaper Black Sea supplies.

However, at the request of buyers, exporters have agreed to reschedule some of the cargoes planned for December, with talk that between three and seven loadings have been put back to March, traders said.

“France’s shipments to China do not look like coming to a stop, but could be less than hoped,” one trader said.

It was unclear why the postponements had been sought, the traders said. But Chinese importers have also booked a large amount of Australian and U.S. wheat in response to a rain-damaged domestic harvest.

“With U.S. and Australian wheat now looking cheaper for China, it looks like delays to (French) shipments will be more of a topic than new sales in the near future,” a second trader said.

Wheat futures on Euronext BL2Z3 hit a near two-year low on Friday as market talk about the postponements emerged, and extended losses on Monday to fresh lows as talks continued.

Traders are watching to see if further postponements or even cancellations of shipments might follow, which could dent French export prospects for the 2023/24 season that had improved following the autumn wave of sales to China.

Doubts over the export programme to China may make French and European Union exporters more reliant on sales to Morocco, which has become the EU’s biggest wheat outlet as Russia has expanded exports to Algeria.

Tags: China, France, wheat