French grain lobby slams strikes as importers look to alternatives

An agriculture lobby group has condemned strikes in France that threaten to prolong industrial action that has paralysed the country’s ports and railways and brought the cereal trade to a standstill, with buyers looking to other origins to cover imports.

France’s railway network has been paralysed since December 5 by strikes over proposed pension reform, which has hampered grain deliveries to export hubs.

While there appeared to be signs the situation was defusing at the start of the week as the government conceded on some issues, wildcat strikes looked set to persisted as some unions appeared split over the terms of the agreement.

Making matters worse for exporters, further strikes are planned for major grain terminals as staff stage a 72-hour walkout from January 22.

“The situation has become grave for cereal exporters in a year of (market) reconquest, with the worst yet to come as ports cease operations,” a letter signed by Intercereales President Jean-Francois Louiseau and seen by Agricensus said.

Some 450,000 mt of grains worth €100 million is stuck in French ports, Intercereales estimates, with sellers forced to fork out €4-6/mt more in transport costs with railways shut.

Those delays have pushed the price of French wheat higher, with premiums for February loading 11.5% up €3/mt over the past two weeks to an €8/mt FOB Rouen premium over the March Euronext futures contract ($225.50/mt), according to Agricensus data.

Some feed compounders in France have halted operations as a result, while importers are starting to switch out French grain for foreign alternatives.

“(Buyers) are starting to position themselves for alternative origins such as North Europe, the Baltics, and the Black Sea... Some customers in West Africa are on the verge of a supply disruption,” Intercereales said.

“(Exporters) don't want to get squeezed on delivery with poor logistics. They are selling wheat that can be moved up to terminal only, which causes bad liquidity on the cash market,” a broker told Agricensus.