Markets

Durum cargo booked despite downgrade concerns

Eric Barker, January 28, 2022

A crop of durum south-east of Moree photographed in mid-October just prior to harvest. Photo: Tony Lockrey, AMPS

SHIPMENTS of Australian-grown durum wheat are set to head to Italy in the coming months after concerns the high-quality crop was going to end up in the feedgrain market.

Widespread flooding across some of Australia’s major durum growing areas in New South Wales and Queensland caused a drawn out and interrupted harvest, with a lot of the crop downgraded.

With a global shortage of the product and high prices, there were calls for GrainCorp to separate the downgraded durum from the rest of the feedgrain with an opportunity to market. The company has since made extra room for downgraded durum.

Peter Howard from the Australian Durum Company said a ship was on its way to take some of this year’s crop, but quality downgrades had made marketing “tricky”.

“We have had a lot of problems with low falling numbers and loss of test weight. I would imagine at least half of this year’s crop is downgraded,” Mr Howard said.

“I don’t think we will have a big year for exporting durum; we have one vessel coming, and maybe we’ll do another.”

Mr Howard said the extent of the downgrades was still unknown, especially in the GrainCorp facilities.

“We buy most of our durum direct from farms, so I’m not sure what the quality is like in GrainCorp storages,” he said.

“But I would imagine some durum still went to general feedgrain markets.”

While Mr Howard was looking at a second shipment, he said there was signs the global shortage of the durum was easing.

“The Canadians have started to indicate some September values and the Italian market has gone a little quiet.

“There has been some activity from North Africa as well.

“I’d imagine it will still remain in short supply for a while.”

Success in the domestic market

While the harvest issues in the northern durum growing regions were drawn out and widespread, South Australian marketer Steve Mellington said it was a successful year for southern crops.

“In South Australia, parts of the durum-growing area had some of the same issues as Queensland and NSW with late rain and some downgrading,” Mr Mellington said.

“But overall, we ended up having a pretty good season, with slightly better than anticipated yields.”

Mr Mellington said the global shortage of durum was also contributing to strong prices on the domestic market.

“The premium DR1 was making about $700 delivered port equivalent, which is historically a very high number for durum,” he said.

“It is very early days to be making any commentary about a move back to normality for global production. But if Canada doesn’t have the devastating year they had last year you would imagine prices will ease.”

 

 

 

 

 

 

 

HAVE YOUR SAY

Your email address will not be published.

Your comment will not appear until it has been moderated.
Contributions that contravene our Comments Policy will not be published.

Comments

Get Grain Central's news headlines emailed to you -
FREE!