Canada could potentially face reduced competition in the increasingly competitive durum market, as Russia’s agriculture ministry is suggesting a six-month ban on durum exports starting from December 1, as reported by Reuters. This, combined with ongoing dry conditions in North Africa, has prompted MarketsFarm analyst Bruce Burnett to advise durum growers to retain their stocks.
“With the tightening durum situation, you’ll probably see better prices here over the next little while,” he said. Already, prices have shown an upward trend, increasing by 25 to 50 cents per bushel in some areas for the week ending November 3. Bids were in the range of $12.50 to $13 following the news from Russia.
However, prices may continue to rise due to the persistent drought in North Africa, where this year’s durum production has declined by 14 percent in Algeria and 18 percent in Tunisia compared to the previous year. Although production rebounded by 75 percent in Morocco, this was in response to the previous year’s disastrous conditions. The dry spell continues in North Africa, where the planting of the new crop is just beginning.
“It’s a very long planting window that they have. They can plant into January, so we’ll have to see,” said Burnett.
“It probably behooves you to wait for that a little bit.”
While Burnett advises patience, he acknowledges that current prices are still attractive, and the premium over spring wheat is significant, so he wouldn’t discourage farmers who need cash from selling some of their durum.
The decision by Russia to limit its durum exports comes after it actively participated in the durum market during the opening months of the 2023-24 campaign. Russia shipped 400,000 tonnes of durum, primarily to Italy, Turkey, and Tunisia. This export volume ranked second after Turkey’s 366,662 tonnes, surpassing Canada’s 104,460 tonnes during the same period.
Burnett speculated that Russia’s pasta manufacturers may have requested the export ban due to the quality damage sustained by much of the country’s durum during the harvest rains. They aim to avoid being left with subpar quality durum. Kazakhstan’s durum crop also suffered from quality issues, further limiting Black Sea durum supplies.
Turkey, which had an unexpectedly large export program, is now winding it down, according to Mercantile Consulting Venture. Mercantile anticipates Turkey will export 1.2 to 1.4 million tonnes of durum this year, compared to the usual volume of around 200,000 tonnes. Approximately one million tonnes of this has already been exported.
As a result, the onus will soon fall on Canada to supply the global market until the new harvest in North Africa and the European Union begins. However, the Canadian durum stocks in the grain handling system are limited, with 36,000 tonnes in Vancouver, 100,000 tonnes in Thunder Bay, and 70,000 tonnes in the St. Lawrence Seaway.
Burnett believes that grain companies may need to start pulling durum into the system to meet the winter demand for the crop, which could bode well for prices. However, he also cautions that the durum market is evolving into a specialty crops-type market, where price increases may occur only at specific companies or even specific locations. In other words, it pays to shop around.
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