Traders and analysts claim that the European Union is having difficulty in exporting its larger wheat surplus, as a record Argentine harvest?intensifies competition, especially on top EU market Morocco. Farmers are also reluctant to sell their crops at low prices.

Argentina's bumper crop is contributing to an increase in global supplies, which puts higher-cost western European suppliers under pressure. Expana, a consultancy, cut its forecast for EU soft-wheat exports by 4% in 2025/26 to 28,8 million metric tonnes. Some also believe that the EU will struggle to export the 30 million tons of soft wheat as had been widely predicted.

Donatas Jankauskas, grain analyst at CM Navigator, said: "Yes, it is a challenge, especially when Black Sea and Argentinean offers are setting the tone for many tenders."

The results of the tenders held by Algeria and Saudi Arabia this week have sparked concern in Europe, as traders had predicted that Argentinean and Black Sea origins such as Russian wheat would cover sales.

Argentine shipments -to Morocco have a particular impact on EU prospects, given that the bloc is heavily dependent on Morocco as Algeria has shifted to Black Sea supplies.

A German trader warned that time is running out as the Moroccan harvest begins in May and demand will also drop.

He said: "I'm not optimistic about West EU wheat exports, given the fierce price competition coming from Argentina and the Black Sea. We also have a very short window to sell new products to our key customer, Morocco." France, EU's largest wheat producer, offset competition from outside Europe by maintaining steady intra-EU shipments. The traders are waiting to see if France is able to increase sales to Egypt after closing the price gap between?Black Sea origins due to the rising costs of shipping through the Black Sea. Exports have been complicated by European farmers' unwillingness to sell at prices that are near the five-year lows. This is especially true for Germany and Poland.

Another trader stated that "West EU prices must fall further if we are to make large new export sales by the summer."

(source: Reuters)