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France's worst drought on record is set to weigh heavily on its wheat harvest, French Agriculture Minister Bruno Le Maire said Tuesday, potentially further pushing up global wheat prices.
France is Western's Europe's largest producer of soft wheat—a low-protein variety used to make pastries and snack foods. It also can be used as a feed for animals.
Already, prices have been rising amid the drought in France and parts of Germany, where a lack of rainfall has left farmland parched.
Forecasters say the Paris new-crop November milling-wheat contract may revisit February's three-year highs of €281 ($401) per ton. Benchmark wheat price rose 1.4% to a high of €242 a metric ton on Tuesday.
In the year to June 2011, the country yielded about 37.14 million tons of soft wheat and exported a record 12.8 million tons. Traders now estimate the drought could cut that exportable surplus to just 5 million tons in 2011-12.
The French government has taken a series of measures to support French farmers through the drought. The government will tap an existing relief fund to aid livestock farmers, worth between €90 million and €100 million, though compensation may total several hundred millions of euros at the end of the season. The government will make up the difference, Mr. Le Maire said. The government is also working out other aid measures to limit prices for straw and other food items for livestock.
France is Western's Europe's largest producer of soft wheat—a low-protein variety used to make pastries and snack foods. It also can be used as a feed for animals.
Already, prices have been rising amid the drought in France and parts of Germany, where a lack of rainfall has left farmland parched.
Forecasters say the Paris new-crop November milling-wheat contract may revisit February's three-year highs of €281 ($401) per ton. Benchmark wheat price rose 1.4% to a high of €242 a metric ton on Tuesday.
In the year to June 2011, the country yielded about 37.14 million tons of soft wheat and exported a record 12.8 million tons. Traders now estimate the drought could cut that exportable surplus to just 5 million tons in 2011-12.
The French government has taken a series of measures to support French farmers through the drought. The government will tap an existing relief fund to aid livestock farmers, worth between €90 million and €100 million, though compensation may total several hundred millions of euros at the end of the season. The government will make up the difference, Mr. Le Maire said. The government is also working out other aid measures to limit prices for straw and other food items for livestock.
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