The European Union has opened up quotas to allow more imports of North American wheat.
But while the EU has said the changes are aimed mainly at Canada, a Canadian Wheat Board official says they are unlikely to have any impact on prairie wheat growers.
That’s because the Europeans are in the market for medium and low quality wheat, which is in short supply in Western Canada.
“They’ve opened up the quota and said we have access, but it’s access for a quality of wheat we don’t really have in Western Canada this year,” said Chris Gillen, the Canadian Wheat Board’s marketing manager for Europe. “It’s a bit of a non-event.”
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Canada’s spring wheat crop this year is mainly top grade and high protein, which isn’t covered by the quotas.
“We are selling a lot of high quality wheat and durum to Europe this year,” said Gillen.
The EU import quotas were put in place at the start of 2003 in response to sizable imports of low quality wheat last fall from the countries of Eastern Europe and the former Soviet Union, which had produced record crops.
The EU has traditionally imported high quality wheat from North America, but found itself flooded with imports of low quality, low priced grain from the Black Sea region.
As a result, the EU found itself in the unusual position of being the world’s top importer of wheat, taking some 12 million tonnes.
In an effort to curb those Black Sea imports, the EU set regional import quotas of 38,000 tonnes for Canada, 572,000 tonnes for the U.S. and 2.37 million tonnes for “third countries,” which essentially meant the Black Sea region.
As of last week, Canada had filled its quota, while the U.S. still had 535,000 tonnes available and the third country quota had 890,000 tonnes remaining.
The supply and demand situation in Europe has changed dramatically this year. Drought has left the EU short of feed wheat and unable to get supplies from the Black Sea region, where production was also down sharply.
Hence last week’s changes, under which any country can now bid on any of the unused quota until the end of December.
An EU official quoted by Reuters News Agency said the new rules are aimed mainly at Canada, which is the only country to fill its quota and able to bid on more.
While Gillen said the board won’t be shipping any feed quality wheat under the opened quota, Ontario, which produced a record crop this year, may be able to use the new rules to ship winter wheat.
The CWB’s main concern in wheat trade with the EU is to ensure continued access for high quality wheat.
Gillen declined to comment on news reports quoting Ukraine’s agriculture minister as saying that his country may buy around 500,000 tonnes of wheat from Canada in 2003-04.
“We have very interesting offers from Canada and our imports of Canadian wheat could total between 400,000 and 600,000 tonnes this season,” Serhiy Ryzhuk told a news conference in Kiev.
After growing a record 18 million tonnes in 2002, Ukraine produced only around 4.5 million tonnes this year due to poor growing conditions. It is expected to buy three to four million tonnes.
News wire reports indicate a 60,000 tonne shipment from Canada arrived in Odessa, Ukraine, last week, but Gillen was closed-mouthed about the board’s plans.
“Certainly there is demand there, but I’m not going to comment about any sales that we’ve made,” he said.
