Prices of the Current International Durum Wheat Market

by | Nov 19, 2020 | Wheat Price | 5,972 comments

World wheat prices in the international market have remained firm in November 2020 and might continue to remain due to dry weather causing an impact on harvest in Northern Hemisphere. Also, poor weather conditions in Argentina caused prices to remain firm within this month. The global demand in wheat exports especially durum wheat, experienced a spike regarding prices within major wheat exporters including US, EU, Canada and Russia. COVID-19 has caused durum export to increase at a high extent, causing high demand and shortage of supply. The shortage of supply in pasta and cereals caused many countries to export durum wheat to raise production capacity.

Durum wheat is processed in manufacturing pasta, bread, tortillas, cereals and many more. As per statistics, durum wheat has experienced a high increase in demand, causing pasta producing countries like Italy, to build more capacity in their pasta manufacturing factories by importing large bushels on durum wheat from Canada. This allowed Canada to increase durum wheat production capacity, allowing its planting area, to expand about 16 per cent and is forecasted to reach 6.1 million tons in 2020/21. Canada exported about 5.4 million tons of durum wheat in 2020, that on a 5.0 million crop top, causing stocks to reach at the lowest level in decades.

Human consumption has risen in terms of food products developed with durum wheat as the main ingredient, causing supplies to tighten and demand to rise high. This situation caused the prices of durum wheat to improve as saskwheat development commission mentioned a rise in demand for durum within “south and south-eastern Saskatchewan” up to $8.30/bu. The sales would start within November 2020, from $8.50/bu (No. 2 CWAD’s) as a decent premium. Elevator companies are bidding from $8.50 on durum which makes the price of durum expected to improve till the end of 2020.

The durum wheat index for the current month of November 2020 is shown below;

Also, durum wheat prices have improved since October 2020, causing an increase in their bid for November 2020, which indicates durum wheat prices will continue to improve till the end of the year 2020.

Italy is currently the largest importer for durum as it’s the top country to produce pasta which requires durum wheat as a main ingredient. Due to high demand and low supply, Italy had to increase its production capacity regarding pasta in factories to tackle high demand. They have imported about 2.1 million tons of durum wheat in 2019/20. Moreover, the durum wheat exporters have raised their wheat production capacity due to high export demand such as Canada has extended planting area about 16% for raising durum wheat production to meet exports demand. As per statistics, Canada is expected to reach about 6.1 million ton for the year 2020/21, which is the highest and will be record-breaking in 4 years. This enabled durum wheat prices to continue improving. It is also important to note the COVID-19 situation and current weather conditions may result in stable prices regarding durum wheat however, Canada is facing good weather in terms of harvest. Other countries, however, may face dry or wet weather conditions.

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