Hong Kong Becomes the Largest Market for Canadian Wheat
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For 2022-23, Canadian durum Wheat production increased by 80% to 5.4 m tons (Mt), thanks to an increase in seeded area and a recovery in yields; total supply increased by 57% to 6.0 Mt, restrained by tight carry-in stocks. Exports are forecast to increase to 4.8 Mt, with increased demand from Italy, Algeria, Morocco, and the United States. According to Statistics Canada (STC), durum exports for this crop year to the end of April 2023 are 4.2 Mt, 118% more than in 2021-22 and 26% above the five-year average.
Total domestic use is pegged at just under 0.8 Mt, and carry-out stocks will fall to 0.48 Mt, 16% less than in 2021-22 and 56% lower than average. According to the International Grains Council (IGC), the durum supply in 2022-23 is estimated at 39.2 Mt, down 1% compared to the previous year and 10% less than the five-year average. Trade is expected to reach 8.6 Mt, +43% over 2021-22, and stocks will close the year at 5.8 Mt, down 11% compared to opening levels. The average Saskatchewan spot price for Canadian Western Amber Durum, no.1, 13% protein (CWAD 1, 13%) is forecast at $450/ton for 2022-23.
For 2023-24, the area seeded to durum Wheat in Canada is projected to increase by 1%, according to STC’s seeding intentions survey released last month. Production is forecast to rise to 5.8 Mt, assuming that trend yields will be realized. Despite tight carry-in stocks, total supply is projected to be up 5% to 6.3 Mt. Seeding of durum Wheat has progressed well throughout May, with 88% planted in Saskatchewan and 99% grown in Alberta as of May 30.
Domestic use is relatively steady and near average levels of 0.7 Mt or 9-10% of the total supply in Canada. Exports are pegged at 4.75 Mt, marginally down from 2022-23, with increased competition from France, where durum production is seeing positive growth. Carry-out stocks are forecast to rebound to 0.8 Mt, a decrease from last month’s report but 67% above 2022-23 and 15% below average.
The IGC forecasts world durum production to drop to 32.4 Mt, down 1% year-on-year due to drought in North Africa and Spain. Exacerbated by tight inventories, global supply is projected to drop 3% to 38.2 Mt. Total world use is forecast to remain relatively stable at 33.5 Mt, with any increase in food use balanced by a reduced feed.
Trade is expected to expand by 4% to 9.0 Mt on higher import needs from the drought-stricken regions and an expansion in commerce from the EU, particularly France. Carry-out stocks are forecast to tighten as the share of major exporters tumbles 24% to 1.8 Mt, with the most significant drawdowns in the EU and North Africa. The Saskatchewan spot price for CWAD 1, 13%, is forecast to decrease from current levels but remain strong at an average of $400/ton for 2023-24.
Non-Durum Wheat in Canada
For 2022-23, Canadian Wheat production increased by 46% to 28.4 Mt thanks to an increase in seeded area and a recovery in yields following the drought of 2021. Total supply increased 28% to 31.6 Mt, restrained by tight stocks. Total exports are forecast at about 19.65 Mt and domestic use at 8.4 Mt. According to STC, Wheat exports from August 2022 to April 2023 are 15.7 Mt, 76% more than last year and 22% above average. Carry-out stocks are pegged at 3.5 Mt, up 13% from the previous year but 22% below average.
According to AgFlow data, Canada exported 4.4 million tons of Wheat in Jan-May 2023. In May, Hong Kong led its export market with 0.12 million tons, followed by Singapore (0.1 million tons), South Korea (0.1 million tons), and Algeria (86,700 tons).
Other sources: AGRICULTURE CANADA
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