July 6, 2010
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Canada seeks to double wheat exports to China
As China's domestic crop is beset by unfavourable weather, the Canadian Wheat Board (CWB) sees the possibility to more than double wheat sales to China, according to Canadian Agriculture Minister Gerry Ritz.
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The sale of 500,000 tonnes by the end of 2011 to Cofco, China's largest government food processor, will be worth CAD130 million (US$123 million), Ritz said.
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China has been an irregular importer of Canadian wheat, buying nearly 2.3 million tonnes in 2004-05 but only 37,000 tonnes in 2008-09, according to CWB data.
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The agreement, mainly for high-quality spring wheat, partly reflects poor growing conditions for China's domestic crop, such as drought in the south and cool temperatures in the north, said Bruce Burnett, director of weather and market analysis for the Wheat Board.
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"You would expect this level of demand from the Chinese every few years," Burnett said. "That's a significant increase in their imports and over our history, they have been a very valuable market for our wheat in Western Canada."
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The poor growing weather will likely keep China's wheat from reaching its best quality and yield, but not cause a major production shortfall, he said.
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Canada has had its own poor growing conditions this spring, with wet weather leaving the biggest unplanted acreage in 39 years. But the Wheat Board will not have trouble finding enough supply for China unless the weather gets even worse, Burnett said.
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China usually gets most of its imported wheat from Australia and the US, but bigger Canadian shipments will not necessarily displace some of those sales, Burnett said.
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"They're looking for a particular spring wheat quality and we are usually the chief supplier of that quality," he said.
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China bought 200,000 tonnes of Canadian wheat, durum and wheat flour from August 2009 through April 2010.
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The Wheat Board, one of the world's largest grain marketers, holds a government-granted monopoly on sales of Western Canada's wheat and barley.
