Soufflet, one of the biggest exporters of French grain, said a port facility it is launching on the Atlantic coast will help narrow the gap with cheaper, higher-quality Black Sea origins in growing export markets in Africa and the Middle East.
The 32 million euro ($40 million) storage and loading site at La Rochelle will allow Soufflet to raise its grain export capacity at the port by a third and to sort supplies more carefully to satisfy overseas millers, Jean-Francois Lepy, head of its trading division, said on Monday.
France, the European Union's largest grain producer and exporter, has lost market share overseas to countries such as Russia that export via the Black Sea, a trend accelerated by a poor French harvest in 2016 and a record Russian wheat crop last year.
The Chef de Baie port facility, expected to begin operations in early April, will increase the group's storage capacity at La Rochelle by half to 188,000 tonnes and raise its vessel-loading pace by more than half, according to Soufflet.
While lowering supply costs was necessary to keep up with rival origins such as Russian wheat, the key was to raise the quality of French grain exports, Lepy said.
"If we don't work on quality then we'll lose the race against the Black Sea region. Our wheat needs to have an inherent quality that meets the international standard, which is now 12.5 percent protein Russian wheat," he said by telephone.
"If we move higher in quality terms then there won't be such pressure to compete directly on price," he said, adding that quality gains would also require longer-term efforts on farming practices.
The new facility would support quality by allowing greater sorting of grain into batches, based on increased sampling of incoming supplies, Soufflet said.
La Rochelle is France's second-largest grain export hub after Rouen in the north. It is often referred to as La Pallice by traders after the historical grain part of the port.
Soufflet would have the potential to ship more than 2 million tonnes of grain a year from La Rochelle, compared with around 1.5 million shipped on average in the past five seasons, Lepy said.
($1 = 0.8041 euros)
(Reporting by Gus Trompiz, additional reporting by Clement Rouget; editing by David Evans)
