Canada is exporting more wheat than traditional competitors the United States and Australia thanks to a low Canadian dollar and the quality of Canadian wheat, says Cereals Canada president Cam Dahl.
“You’re seeing exports from the Black Sea explode through the roof,” Dahl said in an interview May 15. “You’re seeing exports from the U.S. fall through the floor. You’re seeing exports from Australia significantly decline and exports from Canada continue to increase, not at a massive pace, but we’re still increasing our export numbers.”
Canadian Grain Commission data shows Canada exported 10.377 million tonnes of wheat during the first eight months of the 2017-18 crop year (August to March), up 17 per cent from the same period a year ago.
U.S. wheat exports were down 17 per cent between October 2017 and March 2018, U.S. government data shows.
It’s difficult for Canada to compete with the lower-priced, lower-quality wheat from the Black Sea region, which in many markets also has a freight cost advantage. But some wheat customers, including Nigeria, are blending high-quality Canada Western Red Spring (CWRS) wheat with lower-quality Black Sea wheat, displacing Hard Red Winter wheat from the U.S., Dahl said.
“The international marketplace is really rapidly changing,” he said. “It’s changing on the production side driven of course by the Black Sea and it’s also changing on the demand side in places like Nigeria and Bangladesh, which are just a couple of examples of that.
“There are more markets here you would not think of as a traditional wheat market.”
As of March 31 Canada had exported 560,300 tonnes of wheat to Nigeria, up 11 per cent from the same time last year.
Nigeria was Canada’s ninth-biggest wheat buyer during that period.
Canadian wheat exports of 720,500 tonnes to Bangladesh are up 75 per cent, making the southeast Asian country Canada’s sixth-best wheat customer as of March 31.
Indonesia, Japan and the U.S. are Canada’s top three wheat customers, importing 1.2 million, 1.06 million and 984,300 tonnes, respectively.
Canada’s top 10 wheat customers between August and March accounted for 74 per cent of wheat exports.
“We do have, especially CWAD (Canada Western Amber durum) and CWRS (classes) that are differentiated in the international marketplace and that gives us the market access,” Dahl said.
Canada’s reputation for supplying high-quality wheat and durum is a competitive advantage that needs preserving, he said. But he repeated his view that the process for establishing end-use quality standards for western Canadian milling wheat classes needs to be more transparent and predictable.
“I don’t think we’re going to remove subjectivity from the process, but we can work to minimize it and just like the agronomy (team) get back to those yes and no questions,” Dahl said, alluding to the process used by the Prairie Recommending Committee for Wheat, Rye and Triticale (PRCWRT) that decides after assessing at least two years of agronomic, disease and end-use quality data whether to recommend that a new milling wheat be registered, a requirement before commercialization. (There are no end-use quality standards for wheats intended for the Canada Special Purpose class.)
The Canadian Grain Commission is charged with placing newly registered wheats in the class that matches its end-use quality standards, ensuring buyers get the performance they expect.
The CGC relies on the PRCWRT’s quality assessment team to establish class end-use standards, which range from gluten strength to ash content and water absorption, CGC spokesman Remi Gosselin said in an interview May 17.
The process is transparent and open as the PRCWRT represents the entire grain industry and has open meetings, he said.
Dahl counters that the CGC is not obliged to follow the PRCWRT committee’s decisions.
The CGC has placed a new wheat in a different class than intended by its developer, but only because it didn’t meet the intended class’s end-use standard, Gosselin said. Not to have done so could’ve undermined the quality of class hurting end-users and ultimately farmers by damaging Canada’s reputation, he said.