Turkey's dramatic breakthrough as a durum wheat exporter has spared pasta enthusiasts another year of financial misery, and the country is expected to remain a vital source of the component treasured in Mediterranean cuisine.
Turkey, on course to become the world's second-largest durum exporter in 2023/24, has helped cover a supply gap caused by a second drought in three years in top producer Canada, as well as suppressed a price increase witnessed at the start of the season.
The International Grains Council, an intergovernmental agency, predicts that global durum supplies will reach a three-decade low this season. However, Turkish shipments avoided an immediate shortfall and kept durum prices in line with lower global staple grain prices.
Previously a net importer of the hard wheat whose milled flour is used to create pasta, couscous, and some types of bread in the Mediterranean region, Turkey has surprised the market by exporting around 1.5 million metric tonnes of durum so far in the 2023/24 season, which ends in June.
"Turkey, by entering global markets as an exporter, changed the game," Aykut Goymen, chairman of Turkey's pasta industry association, said.
"I can say that it was not a one-off thing and it is sustainable for Turkey to be a durum exporter in the coming years."
Turkey's better-than-expected crop last year left reserves bursting after massive imports in reaction to rising inflation and a previous drought.
Attractive pricing for farmers, including an almost 30% increase in the state's purchase price last year, and irrigation investment have increased sowing and yields. The lira's weakness during an economic crisis also increased Turkish durum's international competitiveness.
With producers growing more and the weather remaining favourable, Turkish production is anticipated to exceed 4 million tonnes for the second year in a row.
That easily outpaces the country's yearly domestic consumption of up to 3 million tonnes. A transition to cheaper soft wheat for cost-conscious markets in Africa and Latin America has reduced demand from the country's big export-focused pasta industry.
Analysts predict another year of significant exports, even if Canadian output improves, with the number in 2024/25 perhaps reaching 1 million tonnes again.
Turkish shipments, together with sizable supplies from Russia and Kazakhstan, have proved a godsend to Italian importers.
"Pasta producers bought durum from Turkey because it was offered to us at competitive prices," said Vincenzo Divella, co-CEO of the eponymous Italian pasta company.
"We had a big problem in Canada ... In our country, the season was disastrous because of the weather and rains."
In Italy, the Turkish crop is regarded as a high-quality alternative, while many processors continue to use Canadian durum.
Lower durum prices, which have decreased by at least one-fifth to revert to levels seen before last summer's concern over Canada's drought, are providing relief to shoppers. Retail pasta prices in Italy fell 3.5% year on year in the two months ending February 25, compared to a 7.4% increase in 2023, according to market data specialist Nielsen.
With Europe preparing to impose tariffs on Russian grain in the aftermath of Moscow's invasion of Ukraine, Turkish trade may become even more important.
"For durum, this could have major consequences, particularly for Italian imports," Severine Omnes-Maisons, analyst at Strategie Grains, said of the proposed levies on Russia, which has supplied one-fifth of EU durum imports so far in 2023-24.
The market may become more reliant on imported supply from Turkey as cultivation in the durum consumption heartlands of Europe and North Africa declines.
Drought has overtaken portions of the Maghreb and southern Europe, researchers say, indicating that the region is becoming too arid for crops that like dry, warm weather. Morocco's cereal harvest is expected to decrease by half this year.
In France, a regular provider to EU countries, severe rain may limit this year's durum area to a new 21st century low
Importers have responded by acquiring grain from Turkey, Russia, and Kazakhstan, a trio regarded by Argus Media analyst Alexandre Marie as a potential "Canada on Europe's doorstep".
However, some are concerned about Turkey's long-term participation, citing its state-managed grain supply and its own climate dangers.
This season's export campaign has been hampered by uncertainties over how much shipments the authorities will permit. This month, the state grain agency TMO terminated an export tender.
"This season, we lived day-to-day with Turkey. "It's still very political," said one European durum trader.
(Source:www.nasdaq.com)
Turkey, on course to become the world's second-largest durum exporter in 2023/24, has helped cover a supply gap caused by a second drought in three years in top producer Canada, as well as suppressed a price increase witnessed at the start of the season.
The International Grains Council, an intergovernmental agency, predicts that global durum supplies will reach a three-decade low this season. However, Turkish shipments avoided an immediate shortfall and kept durum prices in line with lower global staple grain prices.
Previously a net importer of the hard wheat whose milled flour is used to create pasta, couscous, and some types of bread in the Mediterranean region, Turkey has surprised the market by exporting around 1.5 million metric tonnes of durum so far in the 2023/24 season, which ends in June.
"Turkey, by entering global markets as an exporter, changed the game," Aykut Goymen, chairman of Turkey's pasta industry association, said.
"I can say that it was not a one-off thing and it is sustainable for Turkey to be a durum exporter in the coming years."
Turkey's better-than-expected crop last year left reserves bursting after massive imports in reaction to rising inflation and a previous drought.
Attractive pricing for farmers, including an almost 30% increase in the state's purchase price last year, and irrigation investment have increased sowing and yields. The lira's weakness during an economic crisis also increased Turkish durum's international competitiveness.
With producers growing more and the weather remaining favourable, Turkish production is anticipated to exceed 4 million tonnes for the second year in a row.
That easily outpaces the country's yearly domestic consumption of up to 3 million tonnes. A transition to cheaper soft wheat for cost-conscious markets in Africa and Latin America has reduced demand from the country's big export-focused pasta industry.
Analysts predict another year of significant exports, even if Canadian output improves, with the number in 2024/25 perhaps reaching 1 million tonnes again.
Turkish shipments, together with sizable supplies from Russia and Kazakhstan, have proved a godsend to Italian importers.
"Pasta producers bought durum from Turkey because it was offered to us at competitive prices," said Vincenzo Divella, co-CEO of the eponymous Italian pasta company.
"We had a big problem in Canada ... In our country, the season was disastrous because of the weather and rains."
In Italy, the Turkish crop is regarded as a high-quality alternative, while many processors continue to use Canadian durum.
Lower durum prices, which have decreased by at least one-fifth to revert to levels seen before last summer's concern over Canada's drought, are providing relief to shoppers. Retail pasta prices in Italy fell 3.5% year on year in the two months ending February 25, compared to a 7.4% increase in 2023, according to market data specialist Nielsen.
With Europe preparing to impose tariffs on Russian grain in the aftermath of Moscow's invasion of Ukraine, Turkish trade may become even more important.
"For durum, this could have major consequences, particularly for Italian imports," Severine Omnes-Maisons, analyst at Strategie Grains, said of the proposed levies on Russia, which has supplied one-fifth of EU durum imports so far in 2023-24.
The market may become more reliant on imported supply from Turkey as cultivation in the durum consumption heartlands of Europe and North Africa declines.
Drought has overtaken portions of the Maghreb and southern Europe, researchers say, indicating that the region is becoming too arid for crops that like dry, warm weather. Morocco's cereal harvest is expected to decrease by half this year.
In France, a regular provider to EU countries, severe rain may limit this year's durum area to a new 21st century low
Importers have responded by acquiring grain from Turkey, Russia, and Kazakhstan, a trio regarded by Argus Media analyst Alexandre Marie as a potential "Canada on Europe's doorstep".
However, some are concerned about Turkey's long-term participation, citing its state-managed grain supply and its own climate dangers.
This season's export campaign has been hampered by uncertainties over how much shipments the authorities will permit. This month, the state grain agency TMO terminated an export tender.
"This season, we lived day-to-day with Turkey. "It's still very political," said one European durum trader.
(Source:www.nasdaq.com)
