Over the past couple of months, there has been a lot of buzz about Kazakhstan emerging as a durum player.
How did this landlocked country accomplish this? Could Canada be in danger of losing its status as the world’s largest exporter of durum?
Back in February, we noted how Italy and Kazakhstan are getting a bit more friendly when it comes to durum trade.
More recently (a few weeks ago), we told you about how, in addition to Kazakhstan, Italy is buying durum from the US and Russia.
A few weeks ago, the president of the Grain Union of Kazakhstan spoke at the Durum Days conference. This conference is hosted in the Foggia, the main durum production region in Italy, and is extremely important for global players.
Here are the main takeaways:
Kazakhstan’s total durum exports over the last 4 years have grown 2.6 times to nearly 450,000 tonnes (on a calendar year basis). This would put durum third in terms of exports, after the 3.56 million tonnes of exports of SRW wheat and 893,000 tonnes of barley exported by Kazakhstan.
For a comparison, Kazakhstan has averaged nearly 400,000 tonnes in durum exports over the past 3 years. In the same time frame, Canada has done 11 times that at more than 4.74 million tonnes. However, very little of that Canadian durum made it’s way to Italy.
Over these 4 years, Italy, Turkey, and Russia have been the main destinations for Kazakhstan’s durum.
Interestingly, Tunisia has also emerged as a destination for Kazakhstan durum.
In 2015/16, Tunisia imported 283,000 tonnes of durum from Canada. Last year in 2016/17, they imported less than 50,000 tonnes! Any guess where they got the other couple hundred thousand tonnes? (You guessed it – Kazakhstan again!)
To Italy specifically, Kazakh durum exports there have increased by a factor of 10 over the past 3 years, culminating with almost 240,000 tonnes in 2017.
The rise in durum exports is especially impressive considering that Kazakhstan is a landlocked country. Thus, they must export their durum through Russia. When Russian ports get clogged with Russian grain, Kazakhstan durum traders need to find alternate routes. These alternate ports are much more expensive for exporters, making Kazakhstan durum uncompetitive in the global market.
Further complicating shipping, Kazakhstan usually faces a shortage of rail cars at harvest during the September-October timeframe. Logistics improve once they get into January and February.
Other durum producers will be glad to know that despite recent growth, it’s expected that Kazakh durum exports are set to fall in the 2018/19 calendar year thanks to a smaller harvest. Kazakh durum exports are expected to decrease by 11% year-over-year, to roughly 400,000 tonnes. This is mainly due to a smaller harvest this year.
On the production side, there is also good news for Canadian producers. Thanks to a drier spring, it’s expected that the 2018/19 Kazakh durum harvest will fall by 45,000 tonnes, to 525,000 tonnes. This is an 8.5% decrease in production year-over-year.
To sum up, at nearly half a million tonnes, Kazakhstan is emerging as a bonafide player in the global durum market. However, it’s unlikely that the former Soviet Union nation will take over Canada’s market-leading position (except in Italy, that is).