Countries around the world are loading up on European wheat at the fastest pace ever after poor harvests in other major exporters.
The European Union’s exports may top 11 million tons by the end of this month, according to Nathan Cordier, an analyst at consultant Agritel. That would be 25% more than a year earlier and the most for that time of the season in EU data going back two decades. The strong demand has helped push Paris milling-wheat futures toward a record high.
European wheat is filling the gap left by tighter supplies elsewhere and as export taxes slow sales from wheat giant Russia. Romania is one example of that, overtaking Russia to dominate sales to Egypt following a bumper haul. Drought-hit spring-wheat crops in North America mean buyers are instead seeking high-protein supply from northern Europe, Algeria is also turning to those origins, and China is binging on French grain.
The European Commission’s latest data show EU sales at about 9 million tons through late October, but that lacks full figures from France, one of the bloc’s biggest sellers. The U.S. government expects the EU to export 35.5 million tons for the full current season, edging ahead of Russia as the world’s top seller.
Still, it might be tough to sustain the pace. Argentina will soon harvest its crop and could prove competitive to buyers in North Africa, even with high freight costs, Cordier said.
Paris wheat futures on Tuesday touched 284 euros ($329) a ton, the highest for a most-active contract since 2008.
“Wheat prices would need to stay high to eliminate export demand and maintain sufficient supplies for domestic needs,” U.K.-based grain marketer Frontier Agriculture said in a note last week, referring to European sales.