February 28, 2007

 

Brazilian companies want Canada's help to import more Prairie wheat

 

 

The president of a large Brazilian milling company urged Canadian trade officials to do more to convince his government to lower trade barriers on wheat from the Prairies.

 

Antenor Leal, president of Predileto Alimentos, told a Canadian Wheat Board (CWB) grains outlook conference that Brazil needs to import about seven million tonnes of wheat a year.

 

But a trade pact between several South American countries means importers would have to pay about $75 a tonne more in tariffs and freight costs to bring in wheat from Canada instead of nearby Argentina.

 

Leal said the quality of Argentina's wheat used to be excellent, but started to decline after 1965 when the government started buying from farmers who quickly learned quantity was more lucrative than quality.

 

He said the situation is slowly improving now that the country has returned to an open market, but Canada still sells better-quality wheat.

 

He urged Canadian trade officials to ''lobby" Brazil to give Prairie farmers new markets.

 

He used Air Canada's contract with Brazil's Embraer to build a series of regional jets as an example of the kind of clout Canada could have at the negotiating table.

 

He estimates Brazilian millers would buy as much as two million tonnes a year from North America and would prefer Canadian over U.S. grain.

 

Rick Steinke, director of market analysis for CWB, said the board would like to see the federal government work to improve Canada's agricultural trading relationship with Brazil.

 

Steinke said the CWB is likely to emulate US' approach on regional trade agreements and lowering barriers to create more opportunities to western Canadian farmers.

 

Speakers from India and China also gave Canadian industry officials their views on the amount of wheat they will need to buy this year.

 

Tejinder Narang, director of India's state grain agency, said importing wheat has been politically sensitive because it's seen as a sign of dependency.

 

But he added domestic production has been unable to keep up with consumption, in part due to a poor harvest in 2006.

 

The country imported from the Australian Wheat Board and companies such as Cargill and Agricore, but the shipments choked the ports because of India's poor infrastructure.

 

Narang said unpredictable weather makes the outlook for 2007-08 uncertain and it may be necessary to import wheat again.

 

Steinke said overall, farmers should be optimistic about Canadian export markets.

 

Even if Canadian wheat can't get into the Brazilian market, the wheat board can win other contracts that Argentina won't be able to supply because they're filling orders from Brazil.