North Africans continue to enjoy good rains, which they’ve had throughout the winter.
That means they’ll probably harvest double the amount of durum they harvested last summer.
That’s bad news for prairie durum growers.
“Next year’s market is going to be a hard one,” said Antoine Coudiere, a Canadian Wheat Board market analyst who specializes in North Africa and the Middle East.
“There’s going to be more production and lower trade. Everyone’s probably going to be more aggressive in the market.”
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On Feb. 24 the wheat board released its first price projections for the 2003-04 crop year (the crop that will be seeded this spring), forecasting durum prices more than $50 per tonne lower than for this year’s crop for most grades.
No. 1 Canada Western Amber Durum with 14.5 percent protein is forecast to earn $242 per tonne before deductions, compared to this year’s $293 per tonne, or a drop from $7.97 per bushel before deductions to $6.59.
Coudiere said the North African harvest has not begun and North American crops are not seeded, so early forecasts could be radically altered by any large problems in major growing regions.
But if North Africa produces the huge crops expected, durum sellers will suffer. North African production was only 2.1 million tonnes last summer, but is expected to rise to 4.5 million tonnes this year.
The wheat board expects Canadian production to return to about five million tonnes, following last summer’s drought-shortened 3.7 million tonne crop.
World production is only expected to rise from 32 million tonnes this year to 35.5 million, but with so few buyers “one million or two million tonnes is a large magnitude because it’s such a small market.”
North Africa is the world’s biggest market for durum, so there will likely be less demand because of the healthy production there.
Durum makes pasta and bread but is also used for cous-cous, a common North African meal cereal that takes the place of rice, potatoes, pasta or bread.
There is little activity in the world durum market right now, Coudiere said. North African buyers are watching to see how the domestic durum crop yields.
“Their crop is coming in two months and they’ll probably wait for that before getting into buying again,” said Coudiere.
The situation has also lowered the 2002-03 Pool Return Outlook as North African rains have lessened buyer interest and as the strengthening Canadian dollar has brought in fewer American dollars.
Virtually all world grain trade is conducted in U.S. dollars.
Most classes of durum have fallen by about $3 per tonne from the January Pool Return Outlook.
PRO values also fell for wheat, which suffered because of exporter competition for weakening import demand and because of the stronger Canadian dollar.
Feed and malt barley prices were stable.
