French grain traders survey storm aftermath
FRENCH grain traders have been counting the cost of the recent storm damage that wreaked havoc across large swathes of the country at the turn of the year.
A survey by the federation of cereal co-operatives (FFCAT) of 91 of its members has revealed that 955 of their silos were subject to storm damage, of which 160 were described as "serious".
The organisation puts the cost of structural damage at about FFr310m (£31m), before taking account of lost business. The Poitou-Charentes region near the west coast took the biggest battering, with 325 installations hit, for a total cost of FFr85m (£8.5m).
But overall the French grain trade has been largely unmoved by the storms. "Some interior silos were forced to make distress sales in the immediate aftermath, and we were able to pick up the odd parcel at a discount in the first week of January," said Mark Treadway of French merchant, Soufflet.
"Boats are still loading and, given the extensive building programme of the last 18 months and the fact more has come out of intervention than has gone in this season, there is plenty of storage capacity."
French prices are generally much firmer than last year. Latest figures from intervention agency, ONIC, put this seasons French harvest at 35.6m tonnes, compared with 38.6m tonnes in 1998/99.
A reasonably busy export campaign – especially with Iran – has also buoyed the trade, though there is some concern about the lack of new business.
Current delivered values are put at FFr78/100kg (£78/t) basis July, compared with FFr69/100kg (£69/t) a year ago.
UK wheat continues to trade at a £3-4/t discount, worth £67-70/t ex-farm midweek. Export trade is buoyant, with about 300,000t pencilled in for January, which should take exports to 1.9m tonnes for the season so far, says Robert Kerr of Glencore Grain.
Haulage is tight, so premiums may be obtainable from shippers looking to top up cargoes, he adds.
However, with interest rates back in the news, the £ is likely to encounter a volatile few weeks. That, coupled with thin forward export trade, means the market is finely balanced, says Dalgetys Gary Hutchings. "We would advise selling into rallies." *