CWB believes it has the inside edge on Japan sales

CWB officials told farmers meeting here it has the inside track on the lucrative Japanese market for Canadian milling wheat.

“I’ve just come from Japan this week and we are working very hard with the Japanese to try to have the CWB in a very prominent place with regard to supplying the Japanese industry with milling wheat to the point where I think they want the CWB to be their main supplier and we hope to be able to do that,” CWB president and CEO Ian White told farmers March 30. “That’s one of the big premium markets in the world.”

CWB wheat exports to Japan have averaged 1.2 million tonnes annually the last 10 years. But when the market opens Aug. 1, Japan can buy Canadian wheat from any number of sellers, said Roland farmer Walter Krapp.

“The Japanese value long-term relationships,” White said in response and the CWB has that with Japan. “We know it’s a competitive world and we are going to have to compete in that world, but they are saying to us that they will give us the first look at the business, particularly if we can deliver them the quality and the continuity that they are used to.”

White said the CWB might not be able to compete in commodity markets where buyers focus on getting the lowest price.

“We understand that and we will be competing in there where we need to, but we will also try to keep away from those markets where we can,” White said.

Glencore is a commodity trader, he said. The company that wants to by Viterra usually sells on a multiple origin basis, allowing it to source wheat where it’s the cheapest.

“We’ll be selling the grain that we take from Canada and selling to customers who value quality,” White said. “So we see our place very much more down the end of the market… dealing with customers that value that and who will deal with a company like the CWB and generally pay a bit more because we have a relationship with them, we know them and we can satisfy their needs. There is a differentiation in the market.”

The CWB has the authority to buy and sell wheat produced outside of Canada, but doesn’t expect to do so often, White said. Sometimes customers want lower-quality wheat to blend with Canadian wheat and now the CWB can provide both.

About the author

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Allan Dawson

Allan Dawson is a reporter with the Manitoba Co-operator based near Miami, Man. Covering agriculture since 1980, Dawson has spent most of his career with the Co-operator except for several years with Farmers’ Independent Weekly and before that a Morden-Winkler area radio station.

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