The value of Canada’s agricultural and food exports soared during the first eight months of the year despite a strong Canadian dollar.
Agriculture Canada trade statistics indicate that to the end of August, Canada had exported $20.5 billion worth of agriculture and food products, 15.5 percent and $2.75 billion higher than last year’s total in the same period.
The surge added $1 billion to Canada’s food trade surplus for the eight months as the value of exports exceeded the value of imports by $3.6 billion.
A senior Agriculture Canada economist said Oct. 12 that higher commodity prices and increased export volumes boosted the value of exports.
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“Both are involved,” said Andy Archibald, senior economist in the department’s trade evaluation and analysis division.
“And it really is difficult to see any impact on exports of the dollar, though of course you don’t know what the numbers would have been like with a lower dollar.”
To the end of August, the Canadian dollar was approaching parity with the U.S. dollar, effectively reducing prices for commodities sold into the U.S. or for commodities priced in American dollars.
Since then, the loonie has surged past the U.S. dollar and ended last week at close to $1.03 US.
The hog industry, heavily dependent on exports, has said it has been hurt by the higher dollar but Archibald said overall the industry has been coping well.
“Since the dollar has been rising for four years, it seems the Canadian export industry has adjusted to its effects.”
Meanwhile, Canada’s dependence on the American market has been lower this year than in recent years with U.S. sales accounting for $11.5 billion, slightly more than 50 percent of exports. The rest went to close to 200 countries.
Unusual occurence?
Archibald said it could be early evidence that Canada’s long stated goal of diversifying trade and reducing dependence on the U.S. may be happening.
“But it’s too early to say if this is a trend or a blip.”
Still, Canada remains well short of its goal, established in the 1990s, of increasing exports to four percent of world food trade.
Archibald said Canada’s share of world trade was 3.55 percent last year.
“Despite increasing value this year, I don’t expect the percentage share to go up much because the value of trade generally is increasing.”
