Durum -- Sharp drop in output, expanded trade seen for 1999-00

by Teresa Acklin
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World durum production in 1999-00 is projected to drop by about 17.5% from the previous marketing year, according to the most recent estimates by the International Grains Council. The I.G.C. also estimates that durum trade, including semolina, will increase by 3.4% from 1998-99.Total production in 1999-00 recently was forecast at about 29.3 million tonnes, down sharply from the 35.5 million harvested in 1998-99. Among Canada, the European Union and the United States — the world's three major durum suppliers — the largest decline by far is in Canada, where output should plunge by a startling 34% to 4 million tonnes. U.S. production is expected to decline by about 22%, while the E.U. harvest is forecast to shrink by almost 10%.

In Canada, the production declines stem from significantly lower harvested area. Overly wet conditions in the second quarter of 1999 hampered planting, and harvested area is expected to shrink to 1.8 million hectares from 2.9 million in 1998-99, according to Canadian agricultural estimates. Yield was expected to improve by 2% to 3%.

Conversely, in the United States, harvested acreage in 1999-00 is forecast to increase by about 5%, according to the most recent U.S. Department of Agriculture estimates. But yields were expected to slip by 25%, and, as the U.S. harvest was getting in full swing in early September, persistent and untimely rains threatened to slash yields by an even larger percentage.

For U.S. farmers, yield reductions were perhaps less worrisome than the rain's effects on quality. The rains and unseasonably cool weather hit the heart of the U.S. "durum triangle," centered in the state of North Dakota, and affected more than 50% of total area, which had yet to be harvested.

Agronomists reported that up to 35% of post-rain harvested samples showed some sprout damage. That development menaced the available volume of U.S. milling quality durum and promised major price implications for the U.S. durum market.

In just one week, the price of milling quality durum in the production "triangle" soared by as much as U.S.$9 a tonne, and U.S. milling durum futures prices rallied to about U.S.$161. At the same time, local prices for sample grade durum, the grade designation for sprout-damaged durum that goes for livestock feed, plunged to about U.S.$22 a tonne from the typical U.S.$48.

Despite the woes experienced by U.S. durum growers, global availability of milling quality durum should not be threatened this season, as the three major exporters retained ample carryover stocks from the 1998-99 season. Total opening stocks held by the three suppliers this marketing year were estimated at 5.1 million tonnes, compared with only 2.3 million at the beginning of 1998-99.

And despite the fact that 1999-00 production will slide and trade will expand, the three exporters should hold 4.8 million tonnes as 2000-01 begins, still above carryover supplies in most years. Domestic consumption in Canada and the European Union should remain flat to only slightly higher, with use in the United States projected to slip by more than 11%.

The U.S.D.A., in a special report released in September, noted that U.S. consumption of durum products, after rising steadily in the early- to mid-1990s, had reversed in the past two years. On a per capita basis, U.S. domestic durum product use from 1990 to 1996 increased by about 22%, but as of the end of 1998, consumption had fallen back and was just 1.7% higher than in 1990.

Among major durum importers, Algeria, the world's largest, is expected to take 1.8 million tonnes in 1999-00, according to the I.G.C. That amount would be unchanged from 1998-99 and down slightly from the 2.35 million imported in 1997-98.

Morocco's 1999-00 imports should expand to 400,000 tonnes from 350,000 the previous season, as dry conditions will nearly halve that country's harvest. Libya's imports this season are forecast at 300,000 tonnes versus 250,000 a year earlier, but Tunisia's imports are predicted to shrink by 25,000 tonnes to 275,