French grain export lobby eyes Mideast

French wheat is looking for a foothold in Middle Eastern markets such as Iraq and Saudi Arabia to build on a record export pace this season, the head of France's grain export lobby said.

French wheat looks set to meet an official forecast for record shipments of 12.6 million tonnes outside the European Union this season, said Jean-Pierre Langlois-Berthelot, president of export lobby France Export Cereales.

Demand for a good-quality 2010 French crop has been boosted by a drought and export ban in former No. 3 wheat exporter Russia, as well as purchases by importers fearing civil unrest.

But with markets liable to change again when Russia and Ukraine return to normal export flows, France Export Cereales was targeting new destinations beyond its core north African customers, Langlois-Berthelot told the Reuters Global Food and Agriculture Summit.

After signing of a letter of intent with Iraq's grain board last year on establishing ties, the lobby had invited an Iraqi delegation to visit France later this month, he said.

"It's a very important market in this region. We have to be there," he said of Iraq.

Iraq is one of the world's largest wheat importers and its grain board said last week it planned to buy 2.8 million tonnes of wheat in 2011, up from 1.9 million tonnes in 2010, as its tries to raise its strategic stocks.

Import Demand to Stay Strong

In countries such as Iraq and Saudi Arabia, where French wheat is absent mainly because it does not meet local quality specifications, France Export Cereales aimed to show buyers and consumers that French grain could be made suitable by altering flour-making processes, he said.

"These are not markets where our products are going to sell naturally. You have to go about it in a different way there."

In addition to marketing efforts in Middle Eastern countries, the lobby group is pushing to improve the quality credentials of French wheat.

Short-term priorities would be cutting moisture levels, improving cleanliness and raising protein through fertilizer use, while long-term efforts would involve developing new varieties, which could boost gluten that is prized in some countries, he said.

Food demand in Africa and the Middle East offered strong long-term export prospects, especially given the importance of cereals in local diets, he said, stressing per capita consumption of wheat of some 200 kg a year in these importing countries versus only about 70 kg in France.

The essential role of grains in feeding populations was demonstrated by the fact Egypt continued buying wheat at the height of a popular revolt last month, he said.

"These countries have always imported even if it had a huge impact on the budget," he said. "When people cannot eat, they make a revolution."

Langlois-Berthelot, himself a grain farmer, said record exports for French wheat this season could be achieved without risks to internal needs, saying projected ending stocks of 2 million tonnes would be adequate.

Farm office FranceAgriMer last raised this week its forecast of French wheat exports outside the EU for the fifth month in a row to a new record of 12.6 million tonnes.

[Source: By Gus Trompiz and Valerie Parent, Reuters, Paris, 15Mar11]

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