PARIS, Sept 29 (Reuters) - Russia's imminent entry into Algeria's massive wheat import market may not mean much extra competition for now, but France and other European Union suppliers face a major threat from next season, traders and analysts said.

The Algerian state grains agency OAIC has circulated modified tender terms showing a relaxed bug damage limit for high-protein milling wheat, removing a bar to cheaper Black Sea origins like Russian wheat, traders have said.

But high current prices in Russia, which already dominates the market in North Africa's other major wheat importer Egypt, is seen limiting its immediate ambitions in Algeria.

France has long feared Russian ambitions to export wheat to Algeria, which could also cut Algiers' heavy import costs. France ships about 5 million tonnes of wheat per season to Algeria, its main export destination, or around 40% of its exports outside the EU.

Russian prices have soared in the past few weeks on brisk exports and slow selling by farmers, while the government has reiterated it will consider an export cap.

'For this season it won't change things much,' said Nathan Cordier of consultancy Agritel.

'But the fact is in future French wheat won't be able to get away with a big price spread against Black Sea origins.'

International firms may use this season as a test run to offer limited quantities of Russian and Ukrainian wheat, before expanding volumes next season when they may also be joined by Russian companies that have been invited to register with OAIC, traders and analysts said.

France is already experiencing a slump in sales to Algeria this season due to a poor harvest and, unusually, will ship no wheat there this month, giving way to Baltic Sea origins.

French exporters group Synacomex estimated France should retain 60% market share in Algeria against Black Sea competition when it has a decent harvest. But that would still be down from 90% in some years, or a 1-2 million tonne drop in volumes.

Some French traders see hopeful signs in a recovery in French sales to West Africa and a flurry of shipments to China that could see the Asian country overtake Algeria as French wheat's biggest destination this season.

'We are going to have stop thinking the Algerian market is ours and find alternative outlets,' one French trader said.

agriculture