“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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“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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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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Italian Agriculture Minister Maurizio Martina said on Twitter on Monday that Italy had sent a decree to Brussels spelling out proposals to label pasta and rice to show the origin of the raw materials. Rome had send a draft decree of its intent in December, but had not taken the formal step until now.

Italy is proposing that pasta packaging show where the wheat was grown and milled.

Canadian exporters and farmers fear the move would depress prices in Canada, the biggest global durum exporter, as it would require Italian pasta makers to segregate supplies by country. Italy’s move comes as a Canada-Europe free trade deal moves to final stages of approval.

“It’s something that causes us significant concern because it will increase the cost of moving durum into Italy,” Cam Dahl, president of industry group Cereals Canada, whose members include Cargill and Louis Dreyfus, said Tuesday.

Italy is Canada’s second-biggest foreign buyer of durum so far in the 2016-17 crop year, purchasing 522,000 tonnes from August through March, according to Canadian government data.

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

The European Commission said it had not yet received official notification from Italy and that it would then have three months to make observations. If there are none, Italy would be free to proceed with its plans.

European lawmakers have shown an increasing appetite for labeling due to consumer demands for information about food. Italy has also said labeling would help its pasta industry compete with foreign competition.

Canadian Agriculture Minister Lawrence MacAulay said in a statement Wednesday he was assessing the potential impact of the measure, and has raised concerns with members of the European Commission.

Canadian durum farmers last year grew their biggest-ever crop but are expected to sow less durum this spring after disease downgraded quality.

Representatives of Cereals Canada will visit Italy later this month to meet with pasta groups and Brussels to meet with European Union officials.

Canada and Mexico won a similar fight over U.S. beef and pork labels in late 2015.

India and Thailand are the biggest global rice exporters.

— Reporting for Reuters by Rod Nickel in Winnipeg and Isla Binnie in Rome. Additional reporting for Reuters by Philip Blenkinsop in Brussels.

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Imvescor Restaurant Group announced Tuesday it has reached a deal to sell its Groupe Commensal subsidiary to Montreal processor Pasta Romana Foods for about $4.2 million.

Commensal markets vegetarian refrigerated and frozen prepared dishes, soups, stews and sauces through major supermarkets, grocers and health food stores in Quebec and in health food stores in Ontario.

Imvescor said Tuesday its management recently agreed on a plan to sell Boisbriand-based Commensal to better focus on its restaurant franchising business and “to remain an asset-light entity.”

Imvescor’s remaining products in the retail grocery market are items connected to its restaurant chains, including Baton Rouge pulled pork, fries, barbecue sauce, marinade and coleslaw, Mikes pizzas, pasta sauces, pizza sauces and sliced pepperoni, and Scores pork ribs.

Proceeds from the Commensal deal, which is expected to close before the end of Imvescor’s second fiscal quarter of fiscal 2017, are expected to support the company’s “strategic acquisition strategy of brands that complement its existing portfolio.”

Imvescor completed its most recent acquisition at the end of February, buying the Ben + Florentine breakfast and lunch dining chain for $17.7 million. The chain operates in Quebec and Ontario and recently expanded westward with a site in Winnipeg.

“The staff and management of Commensal have been a great team to work with and they continue to produce an exceptional product,” Imvescor CEO Frank Hennessey said in a release Tuesday. “We know that under the guidance of the Pasta Romana group, Commensal will continue to grow.”

Pasta Romana, a family business operating since 1996, makes fresh pastas, pasta sauces, pesto and packaged entrees such as tortellini, cannelloni, manicotti, ravioli and perline, marketing under its own brand name and to private-label clients. — AGCanada.com Network

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