French Wheat Gains Ground in North Africa Amid Black Sea Disruptions
Disruptions to shipping in the Black Sea have had an unexpected consequence: making French wheat more competitive in North Africa and the Middle East. Higher freight costs, war-risk insurance premiums, and growing uncertainty over contract execution have narrowed the traditional price advantage of Russian wheat.
The FOB price gap remains significant, with Russian wheat assessed at around $217 per tonne compared to $280 per tonne for French wheat. However, the delivered-cost picture is different, with recent French wheat cargoes for Egypt sold at around $290 per tonne CIF. Freight from Russian Black Sea ports to Egypt has risen to $60 per tonne amid heightened shipping risks.
French wheat is already being shipped to buyers in North Africa. Two Handysize vessels are expected to arrive at La Pallice to load around 60,000 tonnes of wheat for Egypt, while another French cargo is being loaded for Sudan. Demand is also being supported by the quality of this year's French crop, which has shown higher-than-normal protein levels and lower moisture.
France's return to the Sudanese market is particularly notable, as it has not imported French wheat since August 2008. Traders do not expect Russian wheat to be fully displaced, but if disruptions continue, France could become a major supplier in the region.