Durum wheat a rare bright spot

28 Aug, 2009 01:10 PM

ONE bright spot in an otherwise depressed world wheat market this year is expected to come from the niche durum wheat market.

ProFarmer estimates world durum production this year is likely to be down by 2.8pc, at 37.4 million tonnes.

Durum price levels have drifted from a top of $420/tonne delivered port for the top shelf DR1 paygrade when prices for the season opened down to $370/tonne now.

But ProFarmer's Richard Koch says, however, there is scope for further upside, especially in the higher end durum paygrades.

"Price direction will again be a function of the size and quality of the Canadian and Australian crops, and with weather still a critical determinant in this equation, the market is open to volatility," he says.

He says the Canadian crop needs favourable weather to reach its estimated production of 4.2 million tonnes.

Australian plantings are believed to have gone up, although accurate estimates are thin on the ground.

Mr Koch says it's believed that last year about 550-600,000 hectares went in, while this year the figure is around 750,000ha.

Much of the durum grown in Australia comes from central and northern NSW, with smaller amounts through the other states.

Mr Koch says based on current crop estimates it is likely Australia will have an exportable surplus of durum.

In terms of crop shaping, quality producing areas such as the EU and North America are down on 2008, while domestic users such as North Africa and the Middle East are up.

Both North Africa and the Middle East generally do not export any durum.

Mr Koch says it is likely the grade price spreads are likely to widen further so as to avoid substitution from bread wheats in markets that are price sensitive.

Durum wheat is used primarily in pasta production.


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