Durum wheat: does the 2012 harvest justify the price increase?

durum-wheat-head1 Durum wheat (Triticum turgidum var. durum) is a well-known species in the Mediterranean basin because other than being used to make pasta, it is the main ingredient for couscous and bulghur. In this area, durum wheat is largely grown but not enough for the demand: it is therefore imported from other areas, especially from North America (Canada, Mexico and the U.S.). Like other cereals, durum wheat price varies from year to year depending on global crop yields.
On a global scale a strong production decrease is reported for 2012 for maize (generalized drought) and common wheat (hard frost in some areas of Europe and the Black Sea; floods in Australia; drought in Argentina and in the central areas of the U.S. and Russia). All this is causing an increase in cereal prices.
Compared to other cereals, durum wheat suffered less from drought and yields were good. In Italy and generally in almost all the Mediterranean countries with the exception of Spain and Morocco, the harvest was excellent, both in terms of quantity and quality.
Last week, the U.S. Wheat Associates released data on the dramatic reduction in yield of corn and other extensive crops in the U.S. On the other hand they foresaw a very good harvest for durum wheat. In the U.S. and Canada durum wheat is mainly grown in the Northern Plains (North Dakota in the U.S. and Saskatchewan in Canada). Here the rain and the good temperatures helped the spring-summer production of this species.
Despite a generally positive picture for durum wheat, its prices tend to increase every week from the end of the last harvest (280 euro / ton for durum wheat vs. 265 euro / ton for common wheat – Commodity Exchange of Bologna, 2nd of August 2012). The price increase is due to a common trend more than a reduction in market availability.
The prices of cereals are increasingly subjected to international trends and tend to influence each other.
Durum wheat is an outstanding example: quantity and quality are available on the market but the price tends to increase as a result of bad harvests of corn, common wheat and other cereals.
Given the good yields in the Mediterranean area and the excellent American forecasts we expect that the durum wheat market will be very interesting this year. As for the production, the “hunting” of high quality lots will be easier.
We are wondering whether in Italy the price of the pasta will also increase, or the millers and pasta makers will be able to absorb the rising cost of durum wheat. We’ll keep on following the developments.

A durum wheat head
Una spiga matura di grano duro