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CWB taps past relationship

Securing Asian sales | Japan, other countries also interested in canola

The CWB has sewn up half the spring wheat market in Japan for the next six months.

Derek Sliworsky, who manages the board’s Tokyo office, said Japanese buyers are worried about the new marketing environment coming this August and particularly how that will affect quality.

He said much of their concern comes from their experience with marketing changes in Australia.

“They went through a period where the Australian Wheat Board was serving them quite well into an environment where they were dealing with many sellers,” Sliworsky said during a presentation at Canada’s Farm Progress Show in Regina.

“It was hard to pin down someone completely responsible for the quality.”

The Japanese want the consistent quality supply that they’ve come to expect from the CWB, he said. Every year after harvest, board staff would meet with buyers to plan out the supply for the year ahead on a month-by-month basis.

“What we ship in October, they want that to be exactly the same as what it is going to be in July,” he said.

Because of these concerns, the CWB was able to work on an agreement with the Japanese to supply 50 percent of their Canada Western Red Spring wheat requirements through January.

“They’ve bought September shipments already,” Sliworsky said.

The board also has experience with logistical issues in Japan, where 100 companies operate but five major mills control 70 percent of capacity.

“The Japanese government is responsible for serving the entire market, so they have to get wheat just in time to a lot of these ports because their storage isn’t great and timing is critical,” he said.

Japan tends to buy three months forward from Canada but just two months forward from other countries.

Sliworsky said the board has had almost 100 percent market share on durum for pasta in Japan for many years and is expecting to continue that relationship with five main customers.

Canadian food barley is used extensively in popular barley teas, which are sold in bottles.

He said other opportunities are emerging, including “piggy-backing” canola sales with wheat. Japan and other Asian countries are beginning to ask about buying canola from the CWB.

Sliworsky said the board has already done some buying and selling of canola to familiarize itself with how that works, although he wouldn’t say where.

“Today I had an inquiry from a customer in southeast Asia that’s looking at exploring imports of feed peas,” Sliworsky said. “So we’re going to take a look at working on that as well.”

Sliworsky said markets in Sri Lanka, Indonesia and Thailand also remain important to the board.

For example, shrimp feeders in Thailand are big users of grain. Shrimp will starve if grain doesn’t have enough gluten strength, and the CWB has worked with the Canadian Grain Commission and the industry to change sprout damage tolerances on CWRS wheat to provide a better quality feed to these buyers.

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