Grain industry officials on both sides of the border have dismissed suggestions by a Winnipeg-based agricultural commentator that Canadian durum is being sold to U.S. grain merchants and being re-exported.
The allegation was contained in a News release
news from Morris Dorosh, publisher of a grain industry newsletter called Agriweek.
He said that’s the only explanation for aggressive U.S. durum sales so far this crop year.
Given tight domestic supplies, he said, “American exporters do not have any other source of exportable durum wheat … except Canadian supplies, which they can obtain only from the wheat board.”
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CWB spokesperson Maureen Fitzhenry described Dorosh’s comments as wild and unsubstantiated allegations that betray a misunderstanding of international durum marketing.
She said all of the board’s durum exports to the U.S. go directly to millers who process it into flour for pasta production.
“We categorically reject what is an absurd assertion,” she said. “There is no Canadian durum being re-exported.”
Erica Peterson, marketing specialist with the North Dakota Wheat Commission, said the commission is not aware of any Canadian durum being re-exported.
She acknowledged the commission periodically hears rumours to that effect, but it has never seen any credible information to confirm them.
“I suppose it’s always possible a tiny amount might squeak out, but as far as we know, what is imported is spoken for by domestic milling companies,” she said.
The U.S. Department of Agriculture says 522,000 tonnes of durum had been shipped for export as of Nov. 1, with an additional 355,000 of outstanding sales yet to be executed, for a total of 877,000 tonnes.
The U.S. total durum supplies in 2007-08 are 3.6 million tonnes, made up of 600,000 of carry-in stocks, two million of production and 925,000 of imports from Canada.
Total use is projected to be 3.2 million tonnes, made up of almost one million tonnes of exports and 2.2 million in domestic consumption, leaving year-ending stocks at an historically low 500,000 tonnes.
While exports are running well ahead of the pace set a year ago, the numbers would indicate there will be limited sales over the remainder of the crop year.
In his news release, Dorosh said American traders would only be exporting Canadian wheat to third countries if they were reselling it at a higher, profitable price, suggesting the CWB is “leaving a lot of money on the table.”
Fitzhenry said not only is Dorosh wrong about Canadian durum being re-exported, he is also wrong to suggest that the CWB isn’t getting the best price possible.
She said there is “no way in the world” U.S. exporters are selling durum for more than the CWB.
“We are in a position to get the absolute best price of anybody in the world for durum and that’s exactly what we are doing.”
