One of Canada’s biggest competitors in the wheat export business has lost a key market.
UkrAgroConsult is reporting that Russia has stopped issuing phytosanitary certificates for wheat destined for Vietnam at the behest of Vietnam due to the discovery of thistle seeds in a Russian wheat cargo.
Vietnam was the third-biggest buyer of Russian wheat in 2017-18. Sales plummeted 43 percent to 1.2 million tonnes in 2018-19, according to UkrAgroConsult.
They are down a further 53 percent during the first three months of 2019-20 compared to the same period a year ago.
Bruce Burnett, grain industry analyst with MarketsFarm, believes Vietnam is erecting a phytosanitary barrier to trade.
Russia exports mainly feed wheat to Vietnam and feed demand has been falling in that country and is forecast to drop even more with the discovery of African swine fever in the country.
But he doesn’t think the loss of the Vietnamese market will have a big impact on world grain prices.
Wheat prices are on the rise in Russia despite big reductions in sales to Vietnam, the European Union and Egypt.
“Exporters are not finding it easy to get grain at the present moment,” said Burnett.
Russia produced an estimated 72.5 million tonnes of wheat in 2019-20 compared to 85.2 million tonnes a couple of years ago.
Cam Dahl, president of Cereals Canada, said Canadian exporters are facing similar constraints entering the Vietnamese market.
“We are in the same boat as Russia,” he said.
Vietnam’s plant protection agency notified the Canadian Food Inspection Agency July 10 that creeping thistle had been detected in a bulk vessel shipment of Canadian wheat despite enhanced cleaning and certification measures on the shipment.
The CFIA has suspended phytosanitary certification of bulk wheat exports to Vietnam pending the development of a pilot program incorporating enhanced risk mitigation measures.
“Significant volumes of Canadian wheat and soybeans continue to move to Vietnam in ocean/sea containers,” the CFIA said in an email to The Western Producer.
As far as Dahl knows, Canada and Russia are the only two main exporters shut out of Vietnam.
The country has also raised concerns with the United States, forcing the U.S. to source its wheat from areas of the country without thistle.
Vietnam is not a big market for Canadian wheat, buying 135,600 tonnes in 2018-19.
However, it can be a good market for Canadian feed wheat in years with quality challenges.
Dahl said he doesn’t know why Vietnam has suddenly become so skittish about thistle, which is prevalent in many wheat-producing countries.
“I’m having a hard time understanding this,” he said.
“My question is, where are they going to buy from? And I don’t know the answer to that.”