Spanish drought may yield market opportunities

Drought in Spain will reduce Canada’s competition in an important durum market.

Spain had an unusually hot and dry spring, which hampered crop development, according to a United States Department of Agriculture report.

“The combination of limited water supplies, warm spring temperatures and windy conditions in some areas has provoked plants’ hydric stress and is anticipated to result in a well below average winter grain crop for most of Spain’s grain growing regions,” stated the report.

The USDA’s Foreign Agricultural Service forecasts 14 million tonnes of winter grain production in Spain, down 26 percent from last year’s 19 million tonne bumper crop.

Barley is expected to have the biggest decline to 6.2 million tonnes from 9.3 million tonnes. But the USDA is also calling for a drop in soft wheat and durum production.

The durum crop is forecast at 800,000 tonnes, which would be 22 percent smaller than last year’s 1.03 million tonne crop.

That is good news for Canadian durum exporters, said Marlene Boersch, managing partner of Mercantile Consulting Venture.

“They have been exporting some of the cheap durum into places like Algeria and we’ve been very irritated about that,” she said.

Algeria is Canada’s top market this year for durum. The country bought 886,400 tonnes of bulk durum through the first nine months of the current marketing campaign, according to the Canadian Grain Commission.

But lately Canada has faced unwelcome competition in Algeria and surrounding markets.

“There were a number of occasions where both Spanish and Mexican cheap durum went into North Africa,” said Boersch.

There could be higher than usual demand from Algeria for Canada’s upcoming durum harvest.

The USDA reports that conditions are favourable for winter wheat crops across most of North Africa with the exception of northeastern Algeria, where there is concern due to persistent dryness.

There was a time when drought in Spain caused it to buy huge volumes of Canadian feed peas.

“We don’t really do that anymore. We don’t do a lot of feed peas,” said Boersch. “Almost all the peas go into edible markets now.”

Spain produces some lentils but the USDA report didn’t comment on the state of that crop.

Spain has an annual grain deficit of between nine and 12 million tonnes, according to the USDA report. That deficit will be bigger this year due to the short crop.

Boersch anticipates Spain will need to draw in more feed grains from other European Union countries. She doubts the drought will result in much feed grain shipments from Canada due to logistics.

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