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French farmers hinder grain exports, hold out for higher prices

PARIS - French grain exports are being hampered by farmers who are holding out for better prices, and could prevent exporters from shifting large stocks after a big harvest, cooperative group Axereal said on Wednesday.

PARIS - French grain exports are being hampered by farmers who are holding out for better prices, and could prevent exporters from shifting large stocks after a big harvest, cooperative group Axereal said on Wednesday.

France, the European Union's biggest grain grower, saw production of its main crop, soft wheat, hit a record high this year, and a moderate pace of exports has left the country's farm agency projecting a doubling in wheat stocks.

Grain growers were still holding on their farms some 30-50 percent of the volume harvested in 2015, Jean-Francois Loiseau, president of Axereal and one of the group's 13,000 farmer members, told reporters.

"This is why we are running behind in exports, farmers are led to believe they can wait," he said.

"Even with lower prices this season, there are still Russian and Romanian origins sold at 5-8 euros a ton less. So we can't just wait, we need to be shipping vessels from the opening days of the season."

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Grain exports from France and other western European producers are typically outpaced by Black Sea origins like Russia and Ukraine in the first half of the July-June marketing year. But the trend has been more marked this season with traders citing farmer retention as a factor alongside stiff competition due to large global supplies.

Axereal officials said the group, one of France's biggest grain handlers and exporters, is urging members at cooperative meetings to release more grain, after seeing its volumes marketed fall sharply up to mid-October.

New-crop wheat prices on the Euronext futures market <0#BL2:> rose above 200 euros a ton, a psychologically important threshold for farmers, in the run-up to last summer's harvest but have since stayed well below that level.

Axereal handled 10 million ton of grain last season, with about half collected from its members.

Like other French grain exporters, it has developed a presence in central and eastern Europe to tap into a growing zone for grain production.

Axereal sourced about 300,000 tons of grain in Hungary, Croatia, Serbia and Romania in 2014/15, and may look to expand its presence in Romania through a partnership, officials said.

(Reporting by Gus Trompiz, editing by William Hardy)

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