Cereal grain exports to China unaffected … so far

The top executive at Cereals Canada is reassuring the country’s growers that exports of Canadian wheat and barley to China have not been affected by the recent diplomatic and trade issues that have hit canola.

However, Cam Dahl, executive director with Cereals Canada, said March 27 that situation could change quickly.

“I think the most important point to make is that right now, we are not seeing any restrictions on cereal crops,” Dahl said.

The Canadian grains sector is sitting on pins and needles this spring following confirmation that exports of Canadian canola to China have been curtailed.

Unconfirmed media reports last week suggested that exports of other Canadian crops including wheat, barley, peas and flax have also been affected, but Dahl said he has no evidence to suggest that’s the case.

So far, exports of Canadian wheat and barley to China are up sharply in the 2018-19 crop year, he added.

Canada typically exports about 750,000 tonnes of wheat annually to China. Industry estimates suggest that number could increase to around two million tonnes by the end of the 2018-19 crop year, which ends July 31.

“This year, with exports to China, we’ve seen a significant increase in both wheat and barley,” said Dahl, who characterized China and a mid-sized market for Canadian cereal grains.

Phil de Kemp, executive director with the Barley Council of Canada, said he’s seen no signs that Canadian barley exports to China have been negatively impacted.

“I know there are some rumours out there but right now it’s still business as usual with respect to barley (shipments) to China,” de Kemp said March 27.

Canadian barley shipments to China are up substantially and have been increasing over the past couple of years, he added.

In the 2018 calendar year, exports to China totalled about 1.7 million tonnes. Export volumes to China for the 2018-19 crop year are expected to come in at around 1.3 to 1.5 million tonnes.

The majority of barley exports to China are used by the Chinese malting and brewing industries, which prefer Canadian malting barley for its high protein and high enzyme packages.

Adjunct brewers in China combine Canadian malt barley with other commodities such as corn and rice.

De Kemp said China’s appetite for Canadian malting barley has been strong for some time, particularly in light of production problems in Australia, where barley yields have been low due to lack of moisture.

Dahl said Cereals Canada is aware of the risks that strained diplomatic relations with China pose.

“We know there’s a risk of non-science based restrictions being placed on exports to China, outside of canola. But what might trigger those responses? We just don’t know that,” he said.

Dahl also said it’s unlikely that a measured retaliatory response — such as suspending agricultural trade missions to China or cancelling scheduled visits from Chinese delegations — would benefit the Canadian cereal grains sector.

A number of industry-funded organizations — including the Canadian International Grains Institute and the Canadian Malt Barley Technical Centre — work closely with Chinese buyers of wheat and barley, sharing technical information about Canadian grains and hosting visiting delegations.

Cereals Canada also sends its own delegation to major markets each year to promote Canadian wheat and support marketing efforts in foreign countries.

So far, there has been no discussions about suspending such efforts, he said.

Dahl characterized the current trade situation as “extremely unpredictable” adding that growers and exporters are facing a growing list of costly market access restrictions.

“We’re seeing restrictions and market access issues with canola in China; this is on top of pulses in India, this is on top of durum in Italy, this is on top of concerns in Peru … (and) Vietnam and we have ongoing diplomatic issues with Saudi Arabia,” he said.

Earlier this week, the Western Canadian Wheat Growers Association echoed those concerns and encouraged the Liberal government in Ottawa to send a high-level delegation to China to bring certainty to Canadian canola exports.

“If the prime minister wants to support the Canadian agriculture economy, we should have this agriculture delegation starting immediately and not stopping until we have met with the appropriate officials in China, India, Italy, Peru and Vietnam,” said WCWGA chair Jim Wickett, a farmer from Rosetown, Sask.

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