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French Wheat in ‘Danger Zone’ on Drought, Crops Office Says

France’s wheat crop, Europe’s largest, is in a “danger zone” as drought reduces the potential harvest, the country’s crops office FranceAgriMer said today.

The crop has entered a “critical stage,” and weather in the next two weeks will be decisive for yields, Christian Vanier, FranceAgriMer’s industry coordinator for cereals, said in a presentation in Montreuil-sous-Bois, near Paris.

“We won’t have a very good year,” Vanier said, adding it will be an average year. “There is a real deterioration of the crop conditions.”

France just had its second-hottest April since 1900 and one of the driest since 1953, according to the Agriculture Ministry. Wheat production will fall from last year because of the drought, Michel Portier, general director of Paris-based farm adviser Agritel, said in an interview on May 6.

The country produced 35.6 million metric tons of soft wheat last year and 2.53 million tons of durum wheat, ranking France as the world’s fifth-largest wheat grower after China, India, the U.S. and Russia. Five-year average soft-wheat production was 34.6 million tons.

“For now we can’t translate the worries into yield losses,” Vanier said. “Nevertheless, there is water stress in combination with an advanced stage of vegetative development. We’re in a danger zone.”

Critical Stage

Wheat in some regions of France has entered the so-called grain-filling stage, and without rain the grains will fail to gain volume, Vanier said.

“With every day that passes without rain, we get closer to an irreversible stage,” Remi Haquin, a cereals specialist at FranceAgriMer, said in today’s meeting. After a “good” post- winter start, the situation has deteriorated in the past three weeks, he said.

Haquin, who grows grain, oilseeds and sugar beets on a 350- hectare (865-acre) farm north of Paris, said his wheat development is about two weeks early and is shorter than usual with fewer grain heads this year.

French wheat exports may decline in the 2011-12 crop year on lower availability, Haquin said. Record exports are forecast to reduce the country’s wheat stocks to a seven-year low.

FranceAgriMer lifted its forecast for wheat exports outside the European Union to 12.8 million metric tons in the 12 months to June, 50,000 tons more than last month’s forecast. The estimate for total wheat exports was raised to 19.39 million tons from 19.36 million tons, it said.

Food Prices

Soft-wheat stockpiles at the end of June will be 2.2 million tons, down from last month’s estimate of 2.28 million tons, FranceAgriMer said.

An index of world food prices tracked by the United NationsFood and Agriculture Organization rose to 232.1 points in April from 231 in March, having fallen from a record 237.2 points in February. Milling wheat futures on NYSE Liffe for November delivery have risen 2 percent this year.

Countries in the Middle East and Africa have been importing grain at an accelerated pace to control rising food prices that toppled leaders in Egypt and Tunisia this year. Food is the most important factor in emerging-market inflation, according to Goldman Sachs Group Inc.

Algeria, northern Africa’s second-largest grain buyer after Egypt, purchased 2.95 million tons of wheat of all origins between Dec. 16 and Jan. 26, probably a record for a five-week period, FranceAgriMer said in February.

Wheat Exports

Wheat loadings for export outside the EU stood at 11.5 million tons at the end of April, compared with 8.3 million tons at the same time a year earlier, according to Michel Ferret, FranceAgriMer’s head of research. That included 3.3 million tons of wheat for Algeria, 2.55 million tons for Morocco and 2.4 million tons for Egypt, he said.

The crops office raised its outlook for barley exports to 5.73 million tons from 5.53 million tons a month ago, and compared with 5.21 million tons a year earlier. French barley stocks at the end of June are forecast to be 1.63 million tons, down from 1.93 million tons expected a month ago, and from 3.14 million tons at the end of 2009-2010.

The outlook for French corn stocks at the end of June was raised to 2.79 million tons from 2.51 million tons last month, and compared with 2.37 million tons at the end of 2009-2010.

FranceAgriMer lifted its estimate of wheat planting for this year’s harvest to 5.02 million hectares from 5 million hectares, and up from 4.92 million hectares harvested a year ago.

Barley planting will slip 2.3 percent to 1.55 million hectares, according to the crops office. French corn planting is forecast to slip to 1.52 million hectares from 1.54 million hectares in 2010.

To contact the reporter on this story: Rudy Ruitenberg in Paris at rruitenberg@bloomberg.net.

To contact the editor responsible for this story: Claudia Carpenter at ccarpenter2@bloomberg.net.

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