July 7, 2004

Canada Courting Chinese Wheat Buyers

The Canadian Wheat Board (CWB) has been aggressively pursuing sales of wheat to China, according to export sources.

"I don't think it's a secret that the CWB has been recently trying to make sales of Canadian wheat to China," an export source said. "It appears they have had some success based on the signs."

One of the major signs was a notice to the private trade requesting authorized export sales agents not to be pursuing fresh new-crop sales at this time with the exception of China.

He said the order from the CWB stands until at least August, with part of that request tied to the uncertainty regarding the quality of the wheat crop currently in the process of being grown in the Canadian grainbelt.

Cool temperatures in the early part of the growing season have led to ideas that the quality of western Canada's wheat crop will not be as high as anticipated initially.

Traders said the CWB would love to cultivate China as a regular customer of its wheat, much like it was when the former USSR and China would each take roughly 5.0 million metric tons of wheat from Canada on a crop year basis.

"During that time, it was perfect for the CWB. Trains went east, the trains went west, and the CWB knew they had sales on the book. The logistics also worked well," the exporter said.

He added the CWB would prefer to have a few regular major customers, as opposed to the just in time sales, in which the CWB has more difficulty in making the logistics work.

"That doesn't mean they can't do it, they just have more trouble getting all their ducks in a line," he said.