The announcement this June of the launch of free trade negotiations between Canada and Indonesia has put a spotlight on the Asian market. For Canadian wheat farmers and exporters, the prospect of greater trade with Indonesia is worth close attention.
There are two variables that dictate prices and are out of farmers’ control. First, governments everywhere have long meddled with agriculture and trade policy. The net impact has been to create enormous externalities—barriers that inhibit the laws of supply and demand from dictating prices. Canada, a large net exporter, has often struggled for market access and suffered diminished competitiveness against subsidized farmers. Countries such as China, India and the U.S. as well as the EU continue to restrict market access and some also offer farmer supports that distort the market. There is no indication this will fade.
These have been difficult times for the global brewing industry. While estimates vary, as the smoke clears, it appears world beer production was down between eight and 10 per cent in 2020, less than some early dire predictions of up to 14 per cent. Certain regions were particularly hard hit, such as Africa, Asia and Europe with output drops of 10 to 15 per cent. North and South America fared better with production down by two to five per cent. In China, the world’s largest brewer, production is estimated to have fallen by eight to 10 per cent, or 30 to 35 million hectolitres. To put this in perspective, Canada’s annual beer production is around 20 million hectolitres. In Japan, beer sales reportedly dropped nine per cent, while in Vietnam, which has a large population and strong beer culture, output is estimated to have fallen by a substantial 14 per cent.
In recent years, China has hastily established barriers to Canadian imports that have created trade uncertainty. Canadian farmers have begun to see Chinese policy for what it is, a fragmented approach void of certainty that spurns the norms of regional and international trade agreements. Simply put, trading with China is like bartering on the black market; there is no recourse if you are ripped off. In order to ensure the livelihoods of Canadian farmers are not tied to the whims of Chinese politics Canada needs to take advantage of new markets that embody rules-based trade. If this occurs, farmers can expect predictability, the main ingredient of good business and trade.
The Western Grain Elevator Association (WGEA) has called for change to the way Canadian ports are governed. The organization represents grain companies that move 95 per cent of Canadian grain exports. Aimed primarily at the Port of Vancouver, the WGEA claims all ports lack accountability and grain terminals do not have adequate means to dispute their actions.
BY ELAINE SOPIWNYK • PHOTOS COURTESY OF CEREALS CANADA Canadian wheat has an international reputation for high quality, but this alone isn’t always enough to convince international buyers it’s the right product for their needs. Cereals Canada and the Canadian International Grains Institute (Cigi) amalgamated in June 2020. Cigi now provides technical support for the […]
Co-operation and collaboration are not new in the barley world, whether we’re talking about research and development, working to create and support markets for Canadian barley or dealing with collective market challenges. There are so many issues at play and many moving parts in today’s world of technological complexity, trade issues and regulatory challenges, never mind throwing in a global pandemic.