Whenever a trade dispute erupts, markets can tank and the future for Canada’s export-reliant farmers can look grim.
But a panel of international importers told the Canadian Crops Convention that many lasting trends in foreign markets look good for Canadian crops.
And for all the high-profile disputes, there are also opportunities not getting as much publicity.
“It certainly looks optimistic in the long run,” said Felix Mueller of China’s state-owned COFCO importing company.
“We have solved problems before.”
Mueller was speaking a day after the news broke that China had cancelled Richardson International’s licence to export Canadian canola to that giant market, based on a claim that a “pest” had been found in a recent shipment.
The move has widely been seen as a trade-based reprisal against Canada — part of ongoing diplomatic tensions after Canada arrested Huawei executive Meng Wanzhou following an extradition request from the United States.
Trade snarls and disputes were frequently raised during the two-day conference. Canada’s present problems exporting durum to Italy is a frustration for Canadian farmers, who see the actions of the Italian government, farm organizations and others as little more than naked protectionism.
But Luis Villamayor of the European Flour Millers Association said many high quality wheat markets still value Canadian wheat.
“We prefer your wheat,” said Villamayor, comparing Canadian to Russian spring wheat and the latter’s inconsistent gluten levels.
“This is why we love your wheat.”
And while the Italian durum market is now plagued with politics that is reducing Canadian sales, the recent Canada-European Union trade deal opens up the soft wheat market, which is presently supplied by Ukraine and some small nations.
“You have the opportunity now to compete with that,” said Villamayor.
“The cake is bigger.”
Armando Rosales, director of purchasing for Bunge Mexico, said Black Sea and EU wheat is now making it to Mexico at times, but “it has not necessarily hurt the Canadian imports.”
Canada’s wheat is imported because of its high protein, good quality and consistency, and that need has not changed, nor are competitors filling that part of the market.
While U.S ports on the Gulf of Mexico are close east coast Mexican ports, the western ports are still well-situated for Canadian wheat shipments.
And in a surprising development, considerable Canadian wheat has been getting railed into Mexico by Burlington Northern-Santa Fe railway.
Mueller said nearby Canadian canola sales to China might be disrupted by the evolving dispute between the countries.
But the dispute comes with a cost to China. Already the import price of canola oil has soared, with EU supplies moving into the void at a “huge” premium.
“At the end of the day… there is a need for oil in China,” said Mueller.
“The demand at the end of the day is there.”
That suggests that the trend of increasing demand for oilseeds from China, and growing Canadian exports from Canada, will resume once the dispute cools.
And with Canadian canola now discounted in the world market, and competitive with U.S. soybeans, Canada will probably find additional demand in a number of non-Chinese Asian markets.
“You can tap into that demand.”
Mueller said once short-term problems dissipate, the long-term trends will reaffirm themselves.
“We have to rely on assuming at some stage we are going back to normal,” said Mueller.
“It still looks promising from a demand perspective in the long run.”