The Canadian Wheat Board has picked up some wheat export sales to Africa from AWB Ltd., because the former Australian Wheat Board can no longer guarantee supply, CWB chief executive Ian White said Jan. 28.
“Some customers in Africa who used to get 100 per cent of their supply from the Australian Wheat Board have been told they can’t get that now,” White told farmers at the Keystone Agricultural Producers conference in Winnipeg. “We’ve said, ‘Well that’s fine. We’re happy to take you on and provide you with guaranteed supply year round so long as the price is right.’”
The Australian Wheat Board was stripped of its market monopoly in 2008’s deregulation, leaving the CWB as the world’s only large monopoly grain seller.
White declined to quantify the additional sales to Africa after his speech to farmers, saying it was commercially sensitive information.
The wheat board has a government-granted monopoly to sell Western Canada’s wheat and malted barley. Canada is the world’s largest exporter of spring wheat and durum.
On the conference sidelines, White said world grain buyers are building up stocks as the global economy improves and with prices low. China is forecast to take in one million tonnes of wheat this year, he said.
“They’re relatively self-sufficient so they’re obviously looking to build stocks there at good prices.”
Wheat prices won’t improve until supply and demand fundamentals change, White said, declining to predict when they might turn around.
The wheat board set a grain export target of 18.7 million tonnes earlier last month, the highest in 10 years.
White said “there is a likelihood” that the CWB will raise that target again, based on larger exports of spring wheat.
“We’re getting more comfortable in terms of sales and if we see the opportunity here, we’ll certainly be looking to raise that (target) as long as farmers have the product to deliver to us.”
White also said he expects a CWB contingency fund that’s designed to mitigate risk to post a surplus for 2008-09. The fund had a $28.9-million deficit in 2007-08, sparking criticism from Canada’s Conservative government, which wants to scrap the CWB’s grain monopoly.
The CWB’s accounts won’t become public until after Canada’s House of Commons resumes sitting on March 3.