CNS Canada — Even fresh domestic production numbers aren’t able to move Canada’s durum prices, one analyst says, as the market stays stagnant on lacklustre processing demand from North Africa and Europe.
“I think the trade was anticipating this number for a long time,” said Jerry Klassen, manager of the Canadian office for Swiss-based GAP SA Grains and Produits.
In its December projection, Statistics Canada revised durum production upward to 5.4 million tonnes, compared with the 4.7 million estimated in October.
That figure also outstrips 2014’s production of 5.2 million tonnes.
“Buyers have other issues to deal with,” Klassen said. “It’s kind of the tail end of a period here.”
Buyers are concerned with limited tenders from North Africa and a quiet market in Europe.
Processors are experiencing a significant slowdown in demand and the inability to sell semolina, a coarse durum-based flour, Klassen added.
“That has really negatively affected the durum market,” he said. “And with the larger production it seems like the market is just at a standstill right now.”
But a weaker Canadian dollar has been supportive for durum prices, despite the slow market and limited demand.
“I think right now it’s five months until we start to see some new crop from the Mediterranean and Mexico.”
— Jade Markus writes for Commodity News Service Canada, a Winnipeg company specializing in grain and commodity market reporting.