French farmers wind down fuel blockades after government gesture

By Sybille de La Hamaide and Julie Carriat

PARIS (Reuters) - French farmers began lifting a blockade of refineries and fuel depots on Wednesday after unions made progress in talks with the government over competition from cheaper imports, including palm oil.

The protests, which blocked 18 sites in France and led to some petrol stations running dry, were triggered by France's decision to allow oil and gas major Total <TOTF.PA> to use imported palm oil at a biofuel plant, a cheaper alternative to biodiesel made from locally produced oilseed crops.

That soured already-fragile relations between the European Union's biggest farm sector and the government of President Emmanuel Macron.

Negotiations between the FNSEA union that called the protest and French Agriculture Minister Stephane Travert to resolve the dispute progressed on Wednesday after he sent the union a draft letter in the morning responding to some of their demands.

"We have made breakthroughs and many meetings are lined up (with the minister). We're going to ask our members to suspend with immediate effect their blockade of the different sites," Jeremy Decerle, leader of the FNSEA's young farmers section, told reporters.

Travert called on Total to increase the share of locally grown rapeseed it would use as a feedstock at its La Mede biofuel refinery on the south coast, although he reiterated the government's refusal to go back on the palm oil authorisation.

Total has already committed to use less than 300,000 tonnes of crude palm oil per year at its La Mede biofuel refinery out of a total processing capacity of 650,000 tonnes, and to use 50,000 tonnes of locally grown rapeseed.

"We would like Total to go beyond these 50,000 tonnes," Travert told reporters. "What we are asking the Total group to do is to work with the rapeseed sector to develop supply contracts."

Total Chief Executive Patrick Pouyanne is due to meet President Macron later this week.

Junior ecology minister Sebastien Lecornu has also proposed France call for the EU to cap and progressively cut palm oil imports.

However, FNSEA chief Christiane Lambert, who had initially refused to end the blockades after late-night talks on Tuesday, warned farmers wanted to see progress on a range of issues, including red tape and taxes.

"We're calling a suspension because we're talking about issues that can't be resolved in the blink of an eye," she told the news conference.

"If we don't have meetings in the coming weeks over the points that need resolving, we will come back."

Total said it expected the blockade, which had started on Sunday, to be over by Thursday.

The group's French refineries were not impacted by the protests but 145 of its 2,200 petrol stations across the country saw fuel outages, a spokesman said.

(Reporting by Sybille de La Hamaide and Julie Carriat, Additional reporting by Arthur Connan, Emmanuel Jarry and Bate Felix, writing by Gus Trompiz; Editing by David Evans and Elaine Hardcastle)