Market Update January 2021

PRODUCTION

World Durum production in 2019/20 is estimated higher than the level last season, thanks to strong recorded harvests in Canada, Australia, Syria, Turkey, USA, and Kazakhstan.

Poorer production figures were recorded in the EU where, despite the growing area holding firm, yields fell sharply. North Africa experienced a drought during the cropping cycle and the area planted to durum was decreased Mexico. Thus, import requirements are higher in EU and Nth Africa to meet local demand and Mexico will decrease exports in lieu of local consumption. 

DEMAND/TRADE

Demand for durum wheat for human consumption is impossible to predict in 20/21. It would be easy to predict a fall in demand after the peak recorded in 2020 in response to the global pandemic, however, if the world continues to experience subsequent waves of the virus, demand may remain at these high levels. Use of durum in the animal feed sector will fall however, due to the high quality of the grain this season.

STOCKS

Worldwide, stock inventories are expected lower than in 19/20 despite the strong harvests in Canada, USA and Australia. Despite the increase in production, it is not sufficient to offset the very low carry in stock at the beginning of the season. The EU will be dependent on imports to meet domestic demand and rebuild stockpiles. Most of this grain is expected to come from Canada due to their large harvest and good quality grain. Australian durum will also re-enter the export market, with the premium Italian market being the target. On a world trade level, this should maintain buoyant global pricing.

MARKETING YEAR 2021/22

Strategie Grains predicts that world durum production will increase in 2021/22. After poor production figures this year, increases are expected in the EU, Nth Africa and, and decreases are expected in Canada and Australia after experiencing bumper harvests.

Production in Kazakhstan should hold steady. However, we feel that production in Russia may increase after Vladimir Putin criticised rising pasta prices and in response, Russian officials have responded by planning to more than double durum wheat production by 2025, the agriculture ministry told Reuters on December 23.

LOCALLY

After 3 consecutive years of below average production due to drought, Australian wheat production, (soft and durum wheat), is forecast to more than double in 2020–21 to around 31 million tonnes. This increase is a result of ideal seasonal conditions in New South Wales, and very good conditions in Victoria and South Australia. Less favourable seasonal conditions in Queensland and Western Australia has reduced production figures in these states.

Australian wheat exports, (soft and durum wheat), are forecast to reach around 21 million tonnes in 2020–21, more than double 2019–20 exports.