“This direct import of durum wheat has enriched the structure of China’s imported wheat varieties, facilitated the extension of COFCO’s products upstream and further improved COFCO’s… full industry chain model,” it said in a statement.

COFCO said the durum wheat was purchased by COFCO International and will be transferred to COFCO Haijia (Xiamen) Flour Co. Ltd. for processing.

China has already imported almost two million metric tonnes of durum wheat from Canada this year, according to Chinese customs data.

That does not match Canadian government data, however, which shows China bought no Canadian durum during the past year through September, the most recent month for which data is available.

Chinese purchases of other types of Canadian wheat were larger year-on-year during the 2022-23 crop marketing year, which ended July 31, the Canadian data showed.

The discrepancy is likely due to China’s customs agency classifying wheat differently, said Chuck Penner, a Canadian analyst at LeftField Commodity Research.

READ MORE: High pasta prices set to boil over as Canada’s wheat withers

He said Canada does not have enough durum to sell such a large volume during the year to Chinese buyers and still supply regular importers in the U.S., north Africa and Europe.

Canada accounts for around half of the global trade of durum, a type of hard wheat used to make pasta.

China has imported record volumes of wheat this year, with rain damage to its crop and worries over dry weather in exporting nations fuelling Beijing’s appetite to buy while prices are low.

The world’s largest wheat consumer has imported 10.83 million tonnes of wheat in the first 10 months of this year, a 37.7 per cent surge from a year ago, customs data showed.

— Reporting for Reuters by Mei Mei Chu; additional reporting by Rod Nickel in Winnipeg.

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However, that uncertainty could also makes predicting market trends rather difficult, according to an analyst.

“All of my comments come with a caveat that any given headline could change everything,” said John Weyer, director of commercial hedging with Walsh Trading in Chicago, adding “we seem to be getting those frequently.”

Wheat is showing the most strength of the grains and oilseeds, with the May Chicago contract rising by about 80 cents per bushel off of its lows to trade above $5.70 per bushel on Wednesday (all figures US$).

“Nobody seems to be too concerned about how many carbs they’re eating,” said Weyer, on the increased retail demand for pasta and flour that was finding its way to support the futures.

Stimulus measures introduced to counter the negative economic impact of the COVID-19 coronavirus were also supportive, according to Weyer, with production issues in France and the Black Sea region also underpinning wheat values.

He expected the May wheat contract would face resistance in the $5.80-$5.90 per bushel area, with a pullback to $5.50 a possibility before the market takes another run higher.

However, “we’re in uncharted territory,” and Weyer noted any fresh news could easily tip the grain markets one way or the other.

Strength in the U.S. dollar could also sway the markets, with the rising currency making U.S. grains and oilseeds less attractive for international buyers.

— Phil Franz-Warkentin reports for MarketsFarm from Winnipeg.

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Anecdotal reports of pasta hoarding, due to COVID-19 coronavirus concerns, were also somewhat supportive.

Cash durum bids in Saskatchewan are currently in the $7.50-$8 per bushel range, according to Prairie Ag Hotwire data. That compares with bids at the beginning of the month that topped out at $7.65 per bushel.

“We’re seeing some better values in Western Canada, because of the stronger demand,” said a durum trader who wished to remain anonymous.

There was a very active export program out of Thunder Bay for April/May/June already on the books, he added.

However, there is uncertainty over European demand amid the COVID-19 pandemic. The trader said “logistics have come to a halt in Europe” which has led to temporary strength in global durum prices. However, longer-term implications remain to be seen.

The durum market is also following dryness in North Africa and the possibility of reduced production there.

Agriculture and Agri-Food Canada is now forecasting durum seedings in the country this year at 5.6 million acres, which would be up by 14 per cent on the year. Statistics Canada releases its first survey-based acreage estimates on April 24.

— Phil Franz-Warkentin reports for MarketsFarm from Winnipeg.

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Family-owned Pasta Zara has started court proceedings to get creditor protection after its debt spiralled out of control. The factory, which is located near Tieste, in northern Italy, can produce up to 280,000 tonnes of pasta a year, according to one source close to the matter.

“The factory… has a high capacity and productivity, is well located to serve European and overseas markets and would allow Barilla to respond in an efficient way to a rising global demand for pasta,” Barilla said in a statement.

Barilla’s main plant in Italy is located in Parma and has a production capacity of around 350,000 tonnes of pasta.

The group also makes pasta sauces, bread and biscuits with total sales of around 3.5 billion euros (C$5.24 billion) last year.

In a separate statement Pasta Zara said Barilla’s offer was the best solution for the group, its employees and creditors.

In addition to Barilla, two foreign investors had presented offers to buy the factory, the source said.

— Reporting for Reuters by Francesca Landini and Valentina Za.

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Yet there is one aspect about this year’s crop they already know.

Increased seeded acreage this spring, and market access problems hindering longer-term durum sales, mean farmers might want to temper expectations.

“It’s almost in a way, you can’t buy a break,” said Bruce Burnett, director of MarketsFarm at Glacier FarmMedia.

The combination of plentiful supplies and problems with traditional durum customers in Turkey and Italy will come into play as the crop year progresses, he said.

A good North Dakota durum crop may also limit sales opportunities for Canadian durum into traditional U.S. markets, he added.

The U.S. Department of Agriculture’s world agricultural supply and demand estimates (WASDE), released Aug. 10, rated the North Dakota durum crop as 80 per cent good to excellent. The U.S. has 35.9 million bushels of durum in storage and 1.89 million seeded acres coming off in this year’s harvest.

In Canada, supplies are also strong.

Though this year’s durum harvest will have smaller yields in many areas, it will not have a major impact on overall supplies, Burnett said.

“I think one of the problems the market is going to have (is) we’ve increased our durum area significantly this year,” he said.

Canadian farmers seeded 6.185 million acres of durum this year, compared to 5.205 million in 2017, according to Statistics Canada. Saskatchewan accounted for 4.99 million.

While lack of moisture and a prolonged heat wave have affected durum-growing areas of southwestern Saskatchewan, and into Alberta, Burnett said other durum areas have fared better.

Areas of south-central Saskatchewan around Assiniboia saw much improved moisture, he said, but the heat will pull down prospects.

“So the yield potentials are not where you think they’d be, given some of the early-season precipitation at least.”

Barry Taylor, who farms near Southey, Sask., about 60 km north of Regina, said most durum in his region looks decent.

Most of his 900 durum acres received about average moisture, he said, but most of that came early in the growing season.

Quality looks about average for his area, he said, but prices are not as good as they could be and he’s hoping to see that turn around.

“I’ve got all my durum and I got all my lentils from last year, so I got to sell something,” he said.

“We’ll get rid of it all. Once we start combining and we see what kind of quality it is, it should be good.”

Burnett said analysts will know more about the quality of this year’s harvest in a week or two, but so far it looks like yield prospects for the southern durum areas decline the further one moves west from Assiniboia.

He said areas of central Saskatchewan, north of the South Saskatchewan River and north of Moose Jaw where there is significant durum area, will have better crops.

With a significant crop coming off fields, and problems with some of Canada’s traditional durum buyers, Burnett said he’s inclined to wait for better news on the supply and market access issues, rather than take up a leader’s position.

A leading farm group in Italy has been protesting Canadian durum use by Italian pasta makers, falsely criticizing Canadian durum for high levels of vomitoxin, glyphosate residue and as being genetically modified.

The Italian government has called on pasta makers to include country-of-origin on labels, which would require them to segregate Canadian durum before use.

Italy has also threatened that it will refuse to sign the trade agreement between the European Union and Canada over the durum dispute. It bought $321 million worth of Canadian durum in 2016.

An economic crisis in Turkey will almost certainly keep that country from becoming a major durum buyer this year.

— Terry Fries writes for Commodity News Service Canada, a Glacier FarmMedia company specializing in grain and commodity market reporting.

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The Canada Border Services Agency (CBSA) announced Tuesday it has launched an investigation into whether certain pasta products originating in or exported from Turkey are being sold at unfair prices in Canada.

The CBSA probe will also look at whether subsidies are being applied to the Turkish products in question, the agency said.

A parallel preliminary inquiry by the Canadian International Trade Tribunal (CITT) will examine whether the imports are harming Canadian producers, the tribunal said Friday.

The probes follow a complaint from three dry wheat pasta makers — Italpasta of Brampton, Ont., Toronto-based Primo Foods and Montreal-area processor Grisspasta Products — under the banner of the Canadian Pasta Manufacturers Association in Ottawa.

The CPMA members allege their industry faces “lost production, lost sales, price depression, loss of employment, and reduced profitability” due to price undercutting from Turkey, CBSA said Tuesday.

The goods in question are described as “all dry wheat-based pasta, not stuffed or otherwise prepared, and not containing more than two per cent eggs, whether or not enriched, fortified, organic, whole wheat or containing milk or other ingredients, originating in or exported from the Republic of Turkey, excluding refrigerated, frozen or canned pasta.”

The CPMA has been publicly airing allegations of pasta dumping from Turkey for about two years now. CPMA president Don Jarvis told Allan Dawson of the Manitoba Co-operator in early 2016 that Turkish processors were taking advantage of subsidies to make their products using imported Canadian durum and dump those products back into Canada.

In their announcements this week, neither the CBSA nor CITT named any specific company alleged to be moving the Turkish pasta in question to Canada.

Responding last year to the CPMA allegations, the CEO of Saskatchewan-based AGT Food and Ingredients, owner of Turkish pasta processor Arbel Foods, was quoted in Regina’s Leader-Post newspaper as saying the alleged value of the imported Turkish pasta in question was “less than tiny” relative to that of Saskatchewan’s durum exports to Turkey.

CBSA’s specific reasons for agreeing to the investigation won’t be released until Jan. 12, after which importers have until Jan. 18 to respond to CBSA requests for information. Responses from exporters and government are due Feb. 5.

Meanwhile, the CITT expects to issue a preliminary decision by Feb. 26 on whether the Turkish imports cause harm to Canadian producers, and issue its reasons either way by March 13.

Parties or governments wanting to take part in the CITT inquiry have until Jan. 10 to file, while parties opposed to the complaint have until Jan. 25 to file submissions. Rebuttals to those submissions are due by Feb. 1.

CBSA said it would either announce its preliminary findings as to whether the imports are being sold in Canada at unfair and/or subsidized prices, or would shut down its probe without further measures taken, by March 28.

If CBSA’s preliminary findings warrant a full probe, the agency said, it expects to make its final determinations by June 26. — AGCanada.com Network

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José Fernando Chacón Valencia, production and project manager for Harinera del Valle, a major milling and food processing company in Colombia, says that in the past several years his company has exclusively purchased Canadian wheat. As one of the country’s leading pasta producers, it uses CPSR and CWAD, respectively, for lower- and higher-quality pasta as well as blends of CPSR and CWRS for bread flour.

“We use both common wheat and durum wheat for pasta,” Chacón Valencia said while on a technical exchange at the Canadian International Grains Institute in September. “The market for premium pasta in Colombia is very small, and we only use CWAD for that. For the rest we use 100 per cent CPSR.”

In Colombia, pasta is more often served on special occasions and may be sold in packages as small as 90 grams, particularly in less affluent areas, he says. “Even then it may be for two or three people. They are not concerned whether it is al dente (firm texture) or has a nice (yellow) colour (that durum wheat provides). They look more at the price so in this regard CPSR is a good wheat for pasta.”

Chacón Valencia says that a few years ago CPSR improved in quality and has consistently met his company’s needs. Although at times there have been supply issues, there are no recent concerns.

During his time at Cigi, he also looked at other Canadian wheat classes such as the new Canada Northern Hard Red. “I wanted to find out more about CNHR and it sounds very good.”

Last June, Cigi visited Colombia, Peru and Chile and met with companies that import an average total of about 70 per cent of the wheat in each country. One objective was to learn about their use of CWRS and CPSR for flour and semolina production, both in blends and with other wheats as well as in end-use applications. At the time, the Cigi technical staff met with Cachón Valencia at Harinera del Valle where they found out more about the company’s operations and requirements.

Esey Assefaw, head of Cigi’s Asian products and pasta technology, says that the countries they visited have sophisticated milling and food processing operations, and as relative newcomers to pasta have assimilated it with softer traditional food products like rice.

“Typically they use 100 per cent CPSR for low- to medium-quality pasta and they will also do some blending with (higher-protein) CWRS or other wheats for baking and other end products such as noodles,” he says.

Yvonne Supeene, Cigi’s head of baking technology, says she was impressed with the amount of CPSR used in Latin American countries. “The biggest thing I took away was how valuable CPSR is in the market for pasta, as well as bread. They love it. There is a huge demand and if we had more they would buy it. They aren’t after really high protein, so a low-protein CWRS, or CPSR can meet their requirements. We noticed in those markets how CPSR is as important to them as CWRS.”

The Cigi staff also determined that if CPSR is in short supply it can be replaced with U.S. HRW, which used to be more commonly used than CPSR. Maintaining an ongoing relationship with Latin American customers is important as competitor wheats such as those from the U.S. and Black Sea region are slowly making inroads.

In 2015-16 Canadian wheat purchases totalled 916,000 tonnes (MT) in Colombia, more than 1.1 million MT in Peru, and 284,000 MT in Chile. Durum imports were about 31,000 MT for Colombia, 111,000 MT for Peru and 10,500 MT in Chile.

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“The world still wants (No. 1) CWAD and last year although the profile was mostly (No. 3) CWAD, they still wanted 1 CWAD. So there are a spectrum of markets for durum,” said Doyle, director of export trading with Paterson Grain, during the cereal outlook panel at Grain World in Winnipeg.

Durum crops in Canada in 2016 suffered fusarium damage, which led to lower-quality grain. Grades came in at No. 3 Canada Western Amber Durum (CWAD) and while many markets always want the higher-quality Nos. 1 and 2 grades, they were forced to take the lower-quality grain.

“A lot of buyers had to improvise and so what they did was they sort of managed the specs within the 3 grade, to sort of get minimum vitreous or protein, or whatever aspect they were focused on,” Doyle said.

Countries such as Morocco will buy 600,000 to 700,000 tonnes of No. 1 CWAD usually, according to Doyle. Japan tends to prefer No. 2 or better, but is more flexible than other nations in terms of quality.

This year, however, the durum crop was good-quality, which led to markets being able to buy the higher quality again.

“We’ve seen countries like Morocco switch right back, and of course with the drought in the U.S. they’ve become very strong buyers right out of the box,” Doyle said.

But price does factor into what some markets are willing to buy, he said. For example, Italy, which is world renowned for its pasta, doesn’t usually buy No. 1 CWAD.

“They used to and they will, if the price spread is not too high. It’s a very, very competitive semolina market. The competition in that market is affecting the neighbouring countries,” Doyle said.

But prices have shifted substantially due to the change from such a low- to high-quality durum.

“Obviously the premium for 1 CWAD has really collapsed in comparison to 3s. And so we’ve seen a discount for No. 3 narrowing in very substantially close to harvest,” Doyle said.

The price spread is closing, with Doyle saying this year producers will see the price spread go from $10 to $5 per tonne for No. 1 and 2 CWAD. No. 3 CWAD will drop from $20 to a $10 spread.

— Ashley Robinson writes for Commodity News Service Canada, a Glacier FarmMedia company specializing in grain and commodity market reporting.

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Couscous is a popular traditional dish in the region, a granular product made from durum semolina, a coarse flour which is produced by milling the kernel’s endosperm. It is cooked by steaming and typically served with meat and vegetables.

Earlier this year Cigi conducted its first durum investigative mission to Morocco and Algeria, gathering market information on behalf of the Canadian value chain to ensure CWAD quality continues to meet customer requirements. Cigi staff visited mills and couscous- and pasta-processing companies in both countries as well as an Algerian testing laboratory.

“We don’t have a lot of experience with couscous and have tried to find out more from customers on programs at Cigi but unless you visit their facilities and talk to people there, you don’t get the same sense of what they require,” says Elaine Sopiwnyk, Cigi’s director of grain quality. “It may sound simplistic to say it’s all about colour, but we found out it is all about colour.”

Esey Assefaw, Cigi’s head of Asian products and pasta technology, says the visits revealed that customers were more than satisfied with higher-quality CWAD of which 100 per cent is usually used in premium products, adding that there is market segmentation with low-, medium- and high-quality products. Companies that Cigi visited manufacture both couscous and pasta, with the latter usually viewed more as a value-added side product in bigger processing operations in the region.

“This was Cigi’s first mission to North Africa aside from new crop missions where we present annual crop-quality data to customers,” he says. “We haven’t had an opportunity before to visit mills and processing companies in these countries to get a firsthand look at their markets. We found that the most important requirement in their products was the excellent yellow colour that CWAD gives and which currently faces no competition in the market.”

In Algeria, CWAD is occasionally blended with locally grown durum for a lower-quality pasta product for the domestic market or for export to price-conscious Sub-Saharan African markets, Assefaw says. CWAD is only rarely blended in Morocco with durum from another origin such as France when availability of higher-grade CWAD is limited. More couscous is produced in Morocco than in Algeria which processes more pasta.

“We were told that women, who are primarily responsible for grocery shopping, can go to the supermarket and determine couscous quality based on colour,” Sopiwynk says. “It’s common that their couscous or pasta is purchased from stores selling bulk products and pasta is sold as short goods like rotini rather than spaghetti which would break if sold that way. Middle- or upper-class consumers might go to a grocery store where premium products would be sold as packaged goods with brand names.”

Sopiwynk says the only concern raised during the visit was about DON levels and the impact on imported durum, which emphasizes a need to look at developing fusarium resistance in CWAD (DON or deoxynivalenol, also known as vomitoxin, may be present in fusarium head blight infecting wheat or barley).

Customers indicated protein is also important but not as critical as colour, Sopiwynk says. Hard vitreous kernels or HVK (vitreousness, or translucence, indicates kernel hardness) are related to protein content and milling quality. A certain percentage is required to achieve a higher grade of CWAD from which a better quality semolina is milled.

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The agriculture and industry ministers signed a decree ordering the new labelling policy, saying it would run in an experimental fashion for two years, and criticizing the European Union for not introducing the measure across the 28-nation bloc.

“We are putting Italy in the vanguard of Europe when it comes to labelling as a competitive tool for the Italian (agriculture) sector,” Agriculture Minister Maurizio Martina said in a statement. He called on the rest of Europe to follow suit and show greater “courage.”

Canadian exporters and farmers fear the move will depress prices in Canada, the biggest global durum exporter, as it will require Italian pasta makers to segregate supplies by country, adding to the cost of moving the wheat to Italy.

Annual Canadian sales to Italy are worth an estimated $248 million, based on average export volumes and International Grains Council price data.

The government decree says pasta packaging must now reveal where the wheat was grown and milled into semolina for pasta-making. Rice packaging will have to state where the rice was grown, treated and packaged.

The Canadian government is seeking clarification from Rome and assessing Italy’s trade obligations under the World Trade Organization and free trade agreement between Canada and the European Union, a spokesman for Agriculture Minister Lawrence MacAulay said.

There is no indication that Italy’s move has affected trade yet, he said.

Cam Dahl, president of Cereals Canada, whose members include Cargill and Richardson International, said he expected Italy’s labels to take effect early next year.

“That would unquestionably harm our exports,” he said.

Italy’s Industry Minister Carlo Calenda said the vast majority of Italian consumers wanted to know the origin of their foodstuffs, adding that it was important to promote Italian farmers.

“We want to emphasize the importance of ‘Made in Italy’ and the quality of our production in order to compete with greater strength on international markets,” he said in a statement.

— Reporting for Reuters by Crispian Balmer in Rome and Rod Nickel in Winnipeg.

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