French grain industry warns of severe impact of ongoing strikes

PARIS, Jan 21 (Reuters) - French grain industry players warned of a severe impact on the cereal sector if ongoing strikes over pension reform that have disrupted the country's rail services and port activities since last month were to last.

A month-old public transport strike that has crippled rail services and rolling stoppages by dock workers have left firms in the European Union's biggest grain producer struggling to get their crop to ports and factories.

Intercereales, the French organisation encompassing grain producers, exporters and processors said in a letter sent to the government on Monday that the situation was now dramatic for grain exports.

"The grain industry cannot go without train freight which is particularly adapted to massive grain transport, nor without ports to export nearly 50% of its production," Intercereales said in a letter dated on Monday seen by Reuters.

"The strikes... are paralysing the marketing campaign that was expected to be better than in previous years," it said.

Strikes over pension reform in France have led to production outages at some livestock feed factories as companies have struggled to bring in enough crop supplies, farm sector representatives said last week.

Intercereales said 450,000 tonnes of grain worth some 100 million euros ($111 million) were blocked in French ports.

The logistical problems have supported grain prices in recent weeks, mainly wheat, which hit a 1-1/2 year high on Tuesday at 198.25 euros a tonne.

Intercereales said the extra cost to use lorries instead of rail stood at between 4 and 6 euros per tonne.

"In addition to the negative carbon impact of this modal shift, it is the competitiveness of French grains that is penalised," Intercereales said.

The lobby group also warned that international clients were now turning to alternative origins, including northern Europe, Baltic countries and the Black Sea.

"Some countries in Western Europe are close to supply disruption," it said. (Reporting by Sybille de La Hamaide; Editing by Bate Felix and Jan Harvey)

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