Farmers who grew durum in 1999 are anticipating a healthy premium over their returns for spring wheat.
But those who plan to increase durum acres for 2000 may want to check the first price forecasts, released earlier this week.
The premium for No. 1 durum over No.1 red spring wheat is forecast at a $9 per tonne, down from the $30 per tonne forecast for the 1999-00 crop.
The mid-point of the pool return outlook for No.1 durum is $196 per tonne at port, down $18 a tonne from the 1999-00 forecast of $214 per tonne.
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David Boyes, market analyst with the Canadian Wheat Board, told GrainWorld that world durum production is expected to jump to 31 million tonnes this year, up from 28 million tonnes in 1999-00.
Prairie farmers may plant 40 percent more acres of durum this spring, said Boyes, thanks to relatively poor returns from wheat and oilseeds last summer.
The board thinks Canadian farmers will produce 5.1 million tonnes of durum this year, a 28 percent jump from last year. Boyes expects U.S. farmers to produce 3.2 million tonnes, up from last year’s 2.7 million tonnes.
Historically, when North American production tops the eight million tonne mark, world durum prices plummet.
Total world durum trade is forecast to be 6.5 million tonnes.
Boyes said the stocks-to-use ratio, an important market indicator, may rise as high as 14.3 percent, up from 13.2 percent in 1999-00 and 13.8 percent in 1998-99.
Boyes noted new durum exporters are starting to affect world durum trade. In 2000-01, former minor exporters will grab 20 to 23 percent of world durum trade.
Australia, for example, has increased durum production by 400 percent over the past five years. He forecasts Australia will export 500,000 tonnes this year, five times last year’s level. Mexico, Syria and Turkey are also forecast to export more.
But Boyes noted durum demand is difficult to forecast this early.
That’s because North Africa, the world’s most significant importing region, will not know how much durum it needs until its own crops are harvested.
“In essence, we don’t know what the demand is yet.”
But he did note precipitation in the importing region has been far below normal since Jan. 1. If the dry weather continues, the region’s import demand could rise from current forecasts, said Boyes.