Canberra – January 29, 2021
This is AUSTRALIA’S biggest durum export season since 2016-17.
While hectic is under way with the bulk shipment program, as a vessel loads in Newcastle is for destination Italy.
Aussie durum wheat crop is estimated to weigh in at 483,000 tonnes, and with domestic consumption at around 240,000t, more than 200,000t will make its way to export.
Trade sources say at least 150,000t has already been booked.
Italy is the first destination.
Most of the export business was written in the early part of last year, when the Australian dollar was trading at less than US65 cents, and improved seasonal conditions meant Australia was looking at its first big export surplus since drought hit NSW in 2017.
Currency gave exporters out of Australia an opportunity on plus, and that sent a strong enough price signal to growers to get durum into the ground.
Customers are keen to source Australian durum, and having a surplus position.
This year is a real positive for Aussie farmers.
Along with Italy, there are Middle Eastern and North African nations.
Ahead of Northern Hemisphere new crop durum coming on stream mid-year, logistics could well limit how much could be shipped.
At the moment, the stem’s seems a problem in Australia, as it’s pretty well booked out in Newcastle into July.
However, demand from Italy, Algeria and Tunisia was evident, and more cargoes could well be booked if the Australian dollar weakened and made Australian durum better able to compete with Canadian.
The demand is very strong.
So, strong grower sales early in last year’s growing season were seen, with high-quality offering too.
A hallmark of the harvest just gone, indeed, has been very high quality in durum and bread wheat.
A largely dry finish without being dry enough to prompt problems with the crown rot pathogen, coupled with tailored agronomics from growers.
This harvest also saw unusually high specs on bread wheat.
It collapsed the premium for Prime Hard (APH) domestically and globally over ASW-type wheat to only a few dollars per tonne, as opposed to years when high protein is hard to find and the premium can be $20/t or more.
This stretched the premium between APH and durum to more than $100/t at times last year, roughly triple what can be expected in most years.
The DR1-APH spread has now narrowed to about $45/t, the lowest point seen in the past year.
This is still historically high, and contrasts with years when an oversupply of durum and an undersupply of APH can see durum trading at a discount to the premium milling-wheat grade.
Domestic and global demand for pasta throughout COVID as an affordable family staple had helped support prices.
Durum had a fairly strong premium at planting time; that softened when they got into harvest, but it’s still maintained a bit of a premium.
One of the reasons, is that durum has maintained a healthy demand everywhere and this is despite Canada last year harvesting its second-biggest ever durum crop, which was countered somewhat by a European crop of reduced quantity and mixed quality.
Canada, the United States and Mexico are Australia’s main competitors in the export market.
