GRAIN MARKET UPDATE
Australia generally produces up to 500,000 tonnes of durum a year, though in the last 20 years production has ranged between 120,000 and 800,000 tonnes.
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anada, US, Mexico, European Union, Australia and Turkey are the significant producers and exporters globally with Australia making up only a small part of global production. Annual global production is typically 35-40 million tonnes. While that is a small percentage of the 700 million tonnes total wheat production, the niche crop is a mainstay in global trade. Australia generally produces up to 500,000 tonnes of durum a year, though in the last 20 years production has ranged between 120,000 and 800,000 tonnes. Despite only being a small producer on the global stage, Australia makes up for it with quality. Australia is world renowned for producing very high quality durum with the desired processing characteristics of high protein and gluten, low moisture, and good colour. This year, global production is forecast to be lower yearon-year with less hectares being sown to durum in key producing countries such as Europe and Canada, combined with poor harvesting conditions contributing to widespread quality downgrades. These downgrades will see durum go into feed markets rather than its intended purpose of semolina. Global consumption will see a small increase year on year. Lower production and higher consumption means that global stock levels will tighten. This is positive for Australian durum growers with global end users now required to pay a higher price for quality durum. Durum is grown in South Australia, Victoria, New South Wales and Queensland in high rainfall regions. In general, the area sown to durum in Australia is relatively stable, though influenced by global market fluctuations and seasonal conditions. The majority of Australia’s durum exports either go to the famed Italian pasta market or to North Africa. Depending on the season, approximately half is processed and consumed domestically while the other half is exported. The EU is a net importer, with exports from France into north African countries being offset by imports into Italy.
NOVEMBER 2014
Aside from the EU, Algeria, Nigeria, Tunisia, Morocco and Japan are the key importers of durum, using it to make a wide variety of food products including semolina, pasta, bread, couscous and bulghur. North Africa does have some domestic production; however, due to the variable climate in this region, some of these countries can go from being a net exporter to a net importer thereby increasing volatility in the global demand profile. The key for Australian growers is to maintain the quality characteristics required by the end-user while continuing to innovate, taking every opportunity to increase yield to meet the demand.
GLENCORE’S MARKET KNOWLEDGE BENEFITS GROWERS
Glencore has been involved in the durum market for many years and is largest trader of durum globally. Glencore’s strong relationships direct with Italian pasta makers and flour millers and durum mills across the globe, assisted by a presence in the key export origins of Australia, Canada and the EU means they work directly with each end of the supply chain. Our knowledge of the market means we offer competitive prices to Australian growers. Glencore Grain is very competitive in the durum market, across South Australia, Victoria, New South Wales and Queensland, having led the market for 2014/15 prices and offering 12 day payment terms. Official statistics show that Glencore Grain was the largest bulk exporter of durum out of South Australia and a top three exporter of durum from Australia for the 2013/14 season. As well, our ownership in the Newcastle Agri Terminal reinforces Glencore Grain’s commitment to the New South Wales durum market. Glencore Grain is here for the long term and sees a big future in Australia being a producer of quality durum.
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