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North African Durum Market Shows Continued Promise

Break Date: 6/6/2017 3:05:59 PM
Last Edit: 6/6/2017 3:05:59 PM

The North African region, comprised of Algeria, Morocco and Tunisia, represents the largest durum importing area in the world, and accounts for 30-40% of total world durum imports. The region also produces a significant quantity of durum, but not enough to meet their annual consumption and quality needs. The region regularly imports from U.S., Europe, Canada and Mexico. Algeria is consistently our second largest durum market with average purchases of 4 million bushels. Morocco has been a more challenging market for U.S. durum based on their stringent specifications for semolina color and makes more sporadic annual purchases of around 350,000 bushels.

In May, a U.S. Wheat Associates (USW) trade team consisting of major importing groups from Algeria and Morocco visited North Dakota and Montana to learn more about our region's durum, HRS and HRW production and quality. The team, led by Mina El Hachimi, Regional Administration and Program Manager, USW Morocco, was a unique opportunity, since teams from the area have become less frequent. The group met with breeding and quality researchers at NDSU, staff at the Northern Crops Institute, and received market and logistics updates.

While Algeria is a fairly consistent U.S. durum buyer, there is stiff competition from other cheaper sources. However, the quality of alternate suppliers doesn't always meet processor expectations, and interest in U.S. durum is growing. In Algeria, the Algerian Offices of Cereals still has significant control over durum importation and employs price controls to keep product prices down. Private companies are free to import wheat, and many do, preferring to control the quality they receive. Group SIM, represented on this trade team, imports about three million bushels of durum each year. While meeting with the grain trade while in North Dakota, they were able to see actual samples of U.S. durum from a shipment they had just recently purchased. The company expressed satisfaction with the quality of U.S. durum they have received.

Morocco has proved to be a more challenging market for U.S. durum over the years. Durum is primarily used to make cous cous, and semolina color is key. Traditionally U.S. durum varietal development and quality research was focused on pasta color, protein, gluten strength, and other quality factors for domestic and Italian markets. In recent years, the NDSU durum breeding and quality programs have increased emphasis on semolina color, and newly released varieties show improvement in that area. Team members were able to inspect samples of newer varieties and both sides are hopeful that as acreage planted to new quality varieties increases, U.S. durum will make its way to Morocco on a more consistent basis. Exports of HRS and HRW have been more prominent in recent years. HRW sales will top 30 million bushels this year due to lower priced U.S. HRW and production issues in France. After seeing firsthand the quality attributes of HRW compared to other sources, that class may have found a permanent market. HRS sales have consistently been around 350,000 bushels in recent years and is expected to continue based on demand trends.

A highlight for the team was meeting with grain trade representatives and transportation experts to learn more about sourcing options and tendering for combination shipments with spring wheat. Finding additional U.S. port options out of locations in addition to the seasonal Lakes port would stabilize sales.

Both sides learned a lot from the visit and will lead to more productive purchasing and promotional activities in the future. "The interactions these customers had while traveling on a U.S. trade team will have a great impact on buying decisions," said El Hachimi. "The experience helps build confidence between the U.S. wheat industry and the North African importer."