Certain wheat importers have been hit hard by Canada’s short crop in 2021-22, while others haven’t experienced any disruption in supplies.
Canadian farmers harvested 19 million tonnes of non-durum wheat last fall, a 34 percent drop from the previous year.
That meant some customers were going to be out of luck.
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China and Indonesia are the two markets that were the hardest hit, according to data compiled by the U.S. Department of Agriculture’s Foreign Agricultural Service.
Sales to China through the first seven months of the crop year were 529,000 tonnes, a 1.25 million tonne drop from the same period a year ago.
Indonesia imported 599,000 tonnes of Canadian wheat in that same time frame, down 713,000 tonnes from a year ago.
Daniel Ramage, director of market access and trade policy with Cereals Canada, said the steep declines in those two markets is due in part to a significant rebound in Australia’s wheat production.
“They have emerged out of several years of drought with very large production and of course that region is right in their backyard,” he said.
Australia produced 36.3 million tonnes of wheat this year and 33.3 million tonnes last year following three years of sub-21 million tonne crops.
So Australia has gained market share in China and Indonesia at the expense of Canada.
However, Canadian wheat sales to Japan for the first seven months of 2021-22 were 996,000 tonnes, which is slightly more than the previous year despite the short crop.
Exports to the United States have also been relatively strong at 640,000 tonnes, a 14 percent drop from the same period last year.
Ramage attributes the strong sales to Japan and the U.S. to the exceptional quality of the 2021-22 crop.
Two-thirds of the CWRS crop graded No. 1, which is exceptionally high, and the average protein content of that top grade was 15.2 percent compared to 13.2 percent the previous year.
That meant Canada was able to properly service its premium markets such as Japan and the U.S., which want No. 1 CWRS wheat, as opposed to China and Indonesia, which tend to buy more No. 2 quality.
“That’s partly what explains the shifts,” he said.
West Africa is Canada’s third largest market this year, buying 635,000 tonnes, down from 823,000 tonnes the previous year.
Ramage said countries such as Nigeria have realized the cost savings and functionality benefits of blending top-notch Canadian wheat with lower quality wheat from other exporters.
The USDA is forecasting a 46 percent increase in Canadian wheat production in 2022-23 to 31.58 million tonnes from 21.65 million tonnes last year.
Canadian exports are forecast to rebound to 21.9 million tonnes from an estimated 15.6 million tonnes in 2021-22.
“If we produce a big crop there is no question that there is going to be strong demand for food security globally,” said Ramage.
He said there is good potential to regain market share in China and Indonesia, depending on the size and quality of Australia’s crop.
Ramage noted that Canada is in negotiations with Indonesia on a bilateral trade agreement, which could eventually result in increased export opportunities to that country.
