A Good Year Despite the Uncertainties
The volume of grain and cereals traffic at Nantes ‒ Saint Nazaire Port amounts to around 950 KT for the 2022/2023 season, a respectable total even if it is slightly down compared to the previous harvest, for the which the volume exceeded one million tonnes.
The prospects for the next season are bright, but there are also some uncertainties: even if the harvest that has just begun in France remains promising, several factors of uncertainty at a worldwide level are weighing on the markets.
Geopolitical Uncertainty
The conflict between Russia and Ukraine continues to weigh heavily upon the markets. Ukraine’s export capacity remains a crucial element for the worldwide flows and prices of grain and cereals.
The grain deal permitting the transit of vessels outbound from Ukrainian ports via the Bosphorus Straits has eased the markets and offered a strong competitive edge to Russian sources in the second part of the 2022/23 season. The non-renewal of the grain deal and the targeted attacks on Ukrainian port infrastructures are enabling Russia to exploit its position as the world’s leading exporter of wheat, by blowing hot and cold on the grain and cereals market.
Economic Uncertainty
The current inflationary environment, which is linked in part to the conflict in Ukraine and to its effects on energy markets, could harm the global economy, and even lead to a recession in certain areas of the world. This could further weaken countries that are highly dependent on their supplies, if that phenomenon persists and increases.
For its part, the Chinese market remains uncertain or even bearish. It all depends on the Chinese Government's willingness to dip into strategic stocks to the detriment of imports.
Climate Uncertainty
The effects of climate change seem to be becoming more pronounced in some parts of the world. The conditions are favourable within the European Union, with the exception of Spain and Portugal, which are experiencing extreme drought. In the USA, the drought has also affected yields in the Centre and in the South of the Great Plains. In Canada, the conditions are satisfactory for winter wheat, but the lack of water is threatening the spring wheat seedlings.
Energy Uncertainty
The risk of a shortage of fertilizers appears to be receding, thanks to the easing of gas prices, which has allowed certain production units in Europe to start up again, yet the situation remains precarious. With the intensification of the conflict in the Black Sea Region and the rescinding of the grain deal, farmers and traders are going to have to find other sources of supply for fertilizers, notably for nitrogenous fertilizers, of which Russia is the world’s leading exporter.
In spite of an uncertain future, the Loire Estuary Regional Community retains a healthy dose of optimism and is continuing to invest. Montoir de Bretagne is targeted as a major location for the development of grain and cereals exports. InVivo’s project to expand capacity has been launched, the work on the new reception pit is ongoing, and the construction of the new 15 KT plus capacity silo is scheduled for 2024. This investment should permit greater flexibility and agility between the two facilities in Nantes and at Montoir de Bretagne.
Contact at Nantes Saint-Nazaire Port – Gaël Seyer