France set to import large Romanian wheat cargo

01.08.2016

France is set to import an unusually large volume of Romanian wheat next month, a deal linked to a spike in French prices amid growing fears of a poor harvest in the European Union’s biggest wheat exporter, traders said. A panamax bulk vessel is expected to arrive from Romania at the northern French port of Dunkirk in the second half of August, indicating a volume of 55,000-60,000 tonnes, traders said.

There was also talk that further cargoes of Romanian wheat could be heading to France soon, some traders added. France usually takes in smaller amounts of Romanian wheat, with 17,500 tonnes imported over the whole of the 2014/15 season, and rarely imports significant volumes of foreign wheat so early in the July-June marketing season.

Traders said the import purchase was made in the last week when Paris-based Euronext wheat futures surged to a six-month high as the European market was rattled by estimates calling for the smallest French harvest in more than a decade. Euronext prices have fallen back since Monday, however. Traders said it was not clear what the imported wheat would be used for. Some said it may be used to deliver against Paris futures in order to profit from the price premium versus Romanian wheat.

It was also unclear what quality grade was being imported, although one trader said it was high-quality milling wheat. Romania is a major wheat exporter and usually competes with France in export markets including Egypt, the world’s biggest wheat importer. Expectations of low yields and mixed quality in the French harvest, following heavy rain and a lack of sunshine in spring, have led traders to predict a slump in French wheat exports this season, notably to overseas milling-wheat markets. There was also market speculation on Wednesday that France was set to see a rare wheat import shipment from Russia. But traders were cautious, notably due to an EU import levy that would erode the current price advantage of Russian wheat.


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