REGINA – If the United States caps the amount of wheat imported from Canada, it will need to practice some restraint, said Canadian Wheat Board chief commissioner Lorne Hehn.
“They will need to react in the offshore market and restrict offshore sales,” he said after speaking to the annual meeting of the Canadian Seed Growers Association in Regina.
Hehn used durum wheat as an example. The United States produced 1.9 million tonnes of durum in 1993, but consumed 2.4 million tonnes.
Even with that imbalance in supply and demand, the U.S. exported 800,000 tonnes of durum in 1993-94, much of it with the help of subsidies through the Export Enhancement Program sometimes topping $83.16 per tonne.
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By buying less Canadian durum, Hehn said the U.S. will need to export less and that could reopen foreign markets where the board has been unable – or unwilling – to match the U.S. subsidized price.
“One may counter-balance the other.”
Even with the prospect of better offshore markets, Hehn isn’t happy with a possible cap on Canadian exports to the American market.
“A cap is restrictive and not consistent with the aims and objectives of the WTO (World Trade Organization),” he said. “We don’t like caps.”
Canadian farmers may end up not liking caps either. Hehn said prices for bread wheat may not be affected if U.S. exports are capped at 900,000 tonnes, but there could be a negative impact on durum prices.
