A bigger durum crop in Morocco could limit sales to one of Canada’s top markets, say analysts.
The U.S. Department of Agriculture’s Foreign Agricultural Service estimates that Morocco is in the midst of harvesting 2.02 million tonnes of durum.
That is up from 790,000 tonnes last year and 1.34 million tonnes the year before that.
It is forecasting the country’s total wheat imports, including durum, will fall to 4.2 million tonnes in 2021-22, down from an estimated 6.5 million tonnes in the current crop year.
Morocco has been Canada’s second largest durum customer through the first seven months of 2020-21, buying 740,800 tonnes, according to the Canadian Grain Commission.
Italy is the only country that bought more over that timeframe, with 1.09 million tonnes of sales.
MarketsFarm analyst Bruce Burnett said it appears there will be a return to more normal sales volumes to Morocco after two years of exceptional demand from the country.
But that might not be a bad thing because it appears as though durum supplies are going to be restricted in Western Canada.
He anticipates Canada will end the 2020-21 campaign with 650,000 tonnes of carryout, which is “extremely tight.”
Burnett believes growers will plant about the same amount of the crop as last year, which was 5.7 million acres. But it is dry in durum growing regions of Saskatchewan and Alberta.
“Given the dry conditions that we have, we’re probably going to run into some headwinds on the yield side,” he said.
Jim Peterson, marketing director of the North Dakota Wheat Commission, said Morocco demands top quality durum because it uses it to make couscous and colour is critical for that staple food.
He agrees that Morocco is harvesting a far bigger crop than the past two years but the quality of the crop is yet to be determined. If it is poor quality that could result in higher durum imports than the USDA is forecasting.
He said the European Union also appears to be harvesting a larger crop than last year, which in combination with North Africa’s improved prospects is causing a weakening of prices in the EU.
North American prices will be determined by supply as much as demand.
U.S. growers plan to seed 1.54 million acres of the crop, down nine percent from last year.
Peterson believes the reduction won’t be that large because durum may steal some acres from canola and pulses due to the dry conditions in the Northern Plains.
Burnett said Canada won’t see the same kind of drop because Canadian farmers received higher prices for the crop in 2020-21 than their U.S. counterparts due to a strong export program.
Also, there isn’t nearly as much competition from corn and soybeans in Saskatchewan as there is in North Dakota.
He believes durum supplies are going to be tight in the U.S. in 2021-22 and that could result in more Canadian exports to that country.
But there could be some looming problems with another important customer in North Africa. Algeria has been Canada’s third-largest buyer through the first seven months of 2020-21, importing 362,100 tonnes.
Growing conditions in Algeria are worse than last year but it will still produce a decent crop. The USDA is forecasting 3.9 million tonnes of wheat and durum production, the same as last year.
The USDA said the government of Algeria is having success in its long-running objective of reducing the country’s reliance on imported wheat.
It is forecasting 6.5 million tonnes of imported wheat and durum in 2021-22, which would be the same as last year but well down from the high of 8.4 million tonnes in 2016-17.
Burnett is skeptical of Algeria’s goal of becoming self-sufficient in durum production due to the cyclical nature of crop production in that country with frequent droughts.
“It works until it doesn’t,” he said.