Canada’s durum wheat exports aren’t suffering from the 350,000-tonne cap imposed by Uncle Sam last August.
In fact, they’re thriving.
Figures released last week by the Canadian Grain Commission show durum exports at 1.51 million tonnes from the beginning of the crop year to the end of December of 1994. That’s seven percent ahead of the 1.42 million tonnes during the same period in 1993-94.
The United States has dropped from its rank as number three buyer to number four. To Dec. 31, the U.S. has bought 104,000 tonnes of durum, well below the 253,000 it purchased last year.
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Algeria, the north African country that is the world’s largest export market for durum, is buying heavily from Canada. Sales to Dec. 31 were 757,000 tonnes, double what they were in 1993-94.
Two years of drought have hurt the Algerian crop and spurred its buying spree, says Steve Schuetz, grains analyst with the federal government’s Grains Policy Directorate in Winnipeg.
Sales down from last year
The European Union ranks as Canada’s number two buyer, but at 267,000 tonnes, it has only purchased two-thirds of what it took this time last year.
And Venezuela has usurped the number three position from the U.S. It has bought 130,000 tonnes of Canadian durum to the end of December, nearly three times as much as in 1993-94.
While Canada’s durum exports are ahead of last year, the other good news is the U.S. has kept its subsidies through the Export Enhancement Program at less than $10 (U.S.) per tonne.
Schuetz said that means the Canadian Wheat Board is able to sell for a better price in markets like Algeria, which has been a target for huge EEP bonuses (upwards of $60 U.S. per tonne) during the early part of the 1993-94 crop year. That allows for a better pooled price.
Whether durum can retain its price premium over spring wheat for the third year running will become clearer soon, Schuetz said.
Given the strength of prices, experts are expecting both U.S. and European farmers to plant more crop this coming year. Canadian acreage could challenge the 6.4-million-acre record set in 1989-90.
Schuetz said an increase in production may not be all negative. It could bring the price of durum down to a more affordable level for poorer countries, and perhaps create some extra demand.
