WINNIPEG (MarketsFarm) – The Farm Credit Corporation (FCC) released its report titled Diversifying Canada’s agriculture exports on Tuesday, which included pulses. The 16-page report also looked at some of the pros and cons to diversifying Canada’s wheat, canola and soybeans.
“Canada has done extremely well in establishing strong trade relations in a number of key markets thanks to a long-held focus on getting trade agreements in place,” said FCC Chief Agricultural Economist J.P. Gervais, in a press statement.
“While we believe there is still room for growth in diversifying our agriculture export markets, it won’t be easy. The long-term success of Canadian agriculture relies on our ability to provide a greater diversity in commodities and food products for new and existing export markets,” Gervais added.
The report stated Canada was the world’s fifth largest agricultural exporter in 2018, with about 35 per cent of those exports, worth almost C$34 billion, going to the U.S. Soybeans and pulses have accounted for 20 to 25 per cent of Canada’s total ag exports.
However trade disruptions, such as the U.S./China trade war exemplified the over-dependence on one or a few major customers.
As well, when it came to pulse and other crops, Canada has faced increased competition from Asia, South America and the Black Sea region.
From 1999 to 2017, Canadian pulses saw yearly average increases of around 8.3 per cent. Since then, pulses slipped largely due to India hiking import tariffs as its domestic production increased.
There are major impediments to diversifying Canada’s pulse exports. One was the added cost of developing those newer trade ties.
Another was is the emergence of China as a major player is another drawback, as it hold a tremendous amount of sway in the global marketplace.
Also, demand from new markets would be curtailed by any slowdown in the Chinese and U.S. economies.