Exports of Canadian flour hit a 15 year high in 2006.
Canadian millers shipped 222,890 tonnes of flour to foreign customers, according to figures from Agriculture Canada. That’s the equivalent of about 300,000 tonnes of wheat.
Exports were up nine percent from 2005 and represent a 70 percent increase from 1997’s 131,664 tonnes.
Most of Canada’s exports go to the United States, which bought 181,455 tonnes in 2006, up from 165,288 tonnes the year before.
Jim Thomson, North American marketing manager for the Canadian Wheat Board, is cautiously optimistic about the future of flour exports.
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“I don’t think it’s going to take off and become huge, but I think it will be an important, steady growth market for us,” he said, especially for product going south of the border.
“The consistency that Canadian quality brings to flour is very much desired in the U.S. and I think they seem to be quite anxious to continue to buy from us.”
The board doesn’t sell directly to flour importers. Milling companies search out customers and then work with the board on pricing and logistics.
As for the rest of the world, it’s difficult for Canadian millers to make inroads because they sell flour on a commercial basis, while so much of the world’s flour trade is subsidized.
Thompson said a key to any future growth will be whether World Trade Organization talks lower prohibitive tariffs that rule out sales to markets like Japan and Taiwan. Purchases by South Korea and China have provided some small growth in the overseas market.
In the late 1970s and early 1980s, Canada exported around 600,000 tonnes of flour annually, most of it to Cuba, paid for by the former Soviet Union.
After the Soviet collapse, those sales dried up and exports plummeted. They got a shot in the arm from the 1991 free trade agreement between Canada and the U.S., which removed tariffs from flour.
Sales to the U.S. were just 9,000 tonnes in 1990; by 1995 they had climbed to 150,000 tonnes. Sales fell off somewhat as the Canadian dollar strengthened, but have rebounded in recent years.
“They adjusted to the dollar,” said Thompson. “They like Canadian quality so they came back to Canadian product.”
Western Canada is home to 19 flour mills and five durum mills, and accounts for 34 percent of Canadian milling capacity.
Canadian mills can process 14,555 tonnes of wheat a day, producing 11,031 tonnes of flour, an increase of 30 percent from 10 years ago. Total flour production in 2006 was 2.4 million tonnes.
Thompson added that in addition to flour, exports have been rising for value-added wheat products like baking mixes, dough, cookies and pasta.
Those shipments totalled 785,471 tonnes in 2006, more than double the total from 1998.
The total value of exports of value-added wheat products, including flour, was $2.06 billion.
