Commodities

EXCLUSIVE-China eases wheat quality terms for rain-hit French crop - traders

Credit: REUTERS/STEPHANE MAHE

Chinese buyers have agreed to relax a key quality specification for upcoming shipments of French wheat in response to rain damage in France's harvest, traders familiar with the matter said.

By Hallie Gu, Michael Hogan and Gus Trompiz

PARIS, Sept 15 (Reuters) - Chinese buyers have agreed to relax a key quality specification for upcoming shipments of French wheat in response to rain damage in France's harvest, traders familiar with the matter said.

France, the European Union's biggest grain producer, has become a significant supplier of wheat to China in the past two years due to fluctuating trade relations between Beijing and other suppliers as well as a Chinese push to replenish grain stocks.

Test weights are a common measure of milling quality, determining how much flour can be extracted from a certain volume of wheat.

Chinese importers will now accept readings of 75 kgs (165 lb) per hectolitre, compared with a 77 kg minimum initially required for these import deals, the traders in Europe and Asia said.

Fellow wheat importers Algeria and Saudi Arabia have also eased test weight requirements in response to weak results in France and other European countries following heavy rain.

Traders had previously reported Chinese purchases of around 1 million tonnes of French wheat from the 2021 harvest, putting France on course for a third season of strong exports to China.

However, rain disruption to the French harvest created uncertainty about completion of the export deals and fuelled swings in European prices last month. GRA/EU

The relaxed quality terms have allowed exporters to start loading French new-crop wheat for China, with two vessels of around 60,000 tonnes each leaving France since late August and further loadings expected this month. GRAIN/SHP/FR

While at least part of the sales of the new crop were thought to be destined for animal feed production, the supplies had been booked according to milling wheat specifications, including a 77 minimum for test weights, according to traders.

It was unclear whether exporters of the French wheat would pay penalties for lower test weights. But traders said Chinese importers were keen to fulfil the deals that were booked before a rally that took global wheat prices to eight-year highs in August. GRA/

Chinese importers cancelled a series of animal feed barley shipments from the Black Sea region in recent weeks due to weaker than expected domestic demand and expectations of a large corn crop, traders said earlier this month.

(Reporting by Hallie Gu in Beijing, Michael Hogan in Hamburg and Gus Trompiz in Paris; Editing by Veronica Brown and Emelia Sithole-Matarise)

((gus.trompiz@thomsonreuters.com; +33 1 49 49 52 18; Reuters Messaging: gus.trompiz.thomsonreuters.com@reuters.net))

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