Diversifying export markets can help mitigate ag producers’ risk. This is important in Canada, a country which depends so heavily on exports. While it’s been a successful strategy for our four top crop exports, the challenges of 2019 highlight why we need to reach out to as many markets as possible.
In our latest trade report, Diversifying Canada’s agriculture exports: Opportunities and challenges in wheat, canola, soy and pulses, we outline the countries we see as having the most potential. We eliminated our ‘preferred’ markets where Canadian exporters already have a competitive advantage and defined the world’s largest and quickly growing importers - who aren’t already preferred buyers – as those with the most potential.
Soy
Soy represents perhaps the greatest opportunity for diversification. Canada’s preferred markets accounted for just 6% of total imports in 2018.
Notably, China wasn’t a preferred market, despite importing roughly two-thirds of total global imports. Neither were several of the world’s largest, fastest-growing importers, perhaps as a result of the global market adjustment needed. Market conditions worsened in 2018 due to outbreaks of African Swine Fever and the major re-allocation of U.S. soybeans in response to Chinese market access issues.
Canola
Canadian canola exporters may see future growth in Europe, as we saw happening in 2019. Under normal conditions, European importers generally prefer lower-priced rapeseed from within Europe. But a harsh growing season meant their biodiesel production needed to buy canola. We happened to have lots available at an excellent price.
The year-over-year growth we saw in 2019 was positive – but a challenge to maintain. The countries with the most growth potential for canola imports are all European and likely a hard sell in years with normal production and marketing conditions.
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