If South Korea and Canada sign a free trade agreement soon, Canadian beef could be back there by year end.
South Korea was Canada’s third best beef customer before South Korea banned Canadian beef after BSE was found in Canada in 2003.
“Boneless, bone-in, offal, under 30 months all by the end of this year is basically the track of where it is going,” said Ted Haney, president of the Canada Beef Export Federation.
“Our head negotiator in the FTA said there was no reasonable likelihood of ever ratifying a free trade agreement with Canada unless the beef issue has been dealt with satisfactorily,” he said.
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Returning to pre-BSE key markets has been a struggle for Canadian beef marketers and the federation has advocated using provisions under the World Trade Organization or North American Free Trade Agreement to regain markets, said Arno Doerksen, chair of the federation.
“As Canadians we need to exploit the trade dispute mechanisms that are in place within WTO and NAFTA,” he said.
The federal government supports using these agreements to open more markets, federal agriculture minister Gerry Ritz said during the federation’s annual meeting in Calgary Sept. 21. However, it is a slow process.
“If you are denied access for whatever reason and you do a challenge, it takes two to three years to work it out. There has to be better panels and quicker response on some of these issues when we feel we have been wronged by our trading partners,” he told reporters.
CBEF argues if Canada had full access to international markets it could push up production in Canadian packing plants, which are running at about 60 percent capacity.
Canada exported 60,000 tonnes of beef to Asian and Mexico in 2006. Most went to Mexico, Hong Kong and Macau. In 2002, the last full year of exports, Canada shipped 110,824 to its major markets outside the U.S.
With Canadian processors running far below capacity, there have been problems supplying orders from places such as Hong Kong, which bought about 15,000 tonnes last year. When Canadian stock runs out, it is replaced by other suppliers.
“Occasional short shipping really does tend to cool the momentum in the largest of retail customers, particularly in Hong Kong, who do not want any stock holes in the meat case ever,” said Haney.
Canada returned to Hong Kong in 2005 but Brazil is the major supplier, providing more than 100,000 tonnes per year. In 2006, Hong Kong imported 207,000 tonnes of beef.
Japan is still considered the prime market but penetration has been slow. It has a population of 127 million with an average age of 44 and an average annual income of $78,780 Cdn.
However, confidence in beef remains low and consumption is 70 percent of what it was before BSE was found there in 2001. The average household spends $84 a year on beef.
In 2006, Japan imported 461,000 tonnes of beef compared to 674,000 tonnes in 2001. It brought in 930,000 tonnes of pork, which has held steady for the last five years. It also imported more than three million tonnes of seafood.
Canada exported 2,000 tonnes compared to 2001 when Japan bought 21,000 tonnes of Canadian beef. The U.S. shipped 7,300 tonnes in 2006, while Australia shipped them 406,113 tonnes.
Taiwan resumed buying Canadian beef in June of this year. It has a population of nearly 23 million people with an average age of 36 and a per capita income of $17,630. It is expected to take 3,000 tonnes this year and CBEF projects three times that amount by 2010.
