Wheat exporters watch tariff threat
Canada is facing key developments in its wheat markets, particularly due to a looming 25% tariff in the United States, its fifth largest market for non-durum wheat. This tariff uncertainty is impacting trade, and Canada is encouraged to strengthen risk management programs and AgriMarketing to diversify into global markets. Meanwhile, countries like Mexico, Peru, Morocco, Indonesia, and Bangladesh are growing markets for Canadian wheat, with shifting diets and new trade agreements contributing to increased demand. However, challenges such as storage issues and competition from U.S. wheat remain.
SASKATOON — There are a number of developments in some of Canada’s top markets for wheat, according to a webinar hosted by Cereals Canada.
The most glaring one is the looming 25 per cent tariff in the United States, which is Canada’s fifth largest market for non-durum wheat and the fourth largest for durum.
“The tariff uncertainty is already having a negative impact on our trade,” said Mark Walker, vice-president of markets and trade with the organization.
He said Agriculture Canada needs to ensure that its business risk management programs can respond to the potential disruption to trade in that important market.
Canada also needs to bolster its AgriMarketing Program so exporters can further diversify into reliable markets around the world.
Canada typically ships about 1.3 million tonnes of wheat and 500,000 tonnes of durum to the United States each year.
Another $7 billion of processed wheat products, such as baked goods, move south of the border every year.
Sales of wheat have flourished due to its proximity, harmonized regulations and integrated rail networks, said Leif Carlson, the group’s director of market intelligence and trade policy.
Elaine Sopiwnyk, vice president of technical services, said it is a mature and sophisticated market that does not require any technical support.
Canada faces fierce competition from U.S. wheat in Latin America.
“While Canada has a clear edge over the United States in important markets like Colombia, Peru and Ecuador, the United States dominates the substantially larger market in Mexico,” said Krista Zuzak, the group’s director of crop protection and production.
Mexico has purchased an average of 676,000 tonnes of Canadian non-durum wheat over the past five years, or four per cent of total exports.
The country is also the world’s third largest user of wheat flour, with consumption expected to reach 7.9 million tonnes by 2028.
Lisa Nemeth, director of market support and training with Cereals Canada, said Mexico has been self-sufficient in durum production since 2021, but that changed in 2024.
“There is drought in the durum production area in Mexico and it has drastically reduced the availability of durum,” she said.
That means the country will be importing product in 2024-25. Cereals Canada has reached out to Mexico’s milling association to offer technical support if needed.
Peru has become the largest Latin American market for Canadian wheat, purchasing an average of 1.3 million tonnes of non-durum wheat per year, or seven per cent of total exports.
It is also the biggest Latin American market for Canadian durum, buying more than 100,000 tonnes per year.
Zuzak said Peru recently updated its import requirements.
“A longstanding phytosanitary concern regarding creeping thistle seed in Canadian wheat shipments has been addressed through updated import regulations,” she said.
Effective March 1, 2025, Peru has adopted post-entry measures to replace its former zero tolerance approach.
Morocco is the second largest buyer of Canadian durum, accounting for 20 per cent of total exports.
Nemeth said it is a quality conscious market that buys No. 1 CWAD.
Canada dominates with a 92 per cent share of the import market, with France, Spain, the U.S. and Turkey chipping in small amounts.
Sopiwnyk said the imported durum is used to make couscous, a dish that is typically served on Friday nights in Morocco.
Entire grocery store aisles are devoted to couscous of varying sizes and brands.
However, Morocco consumes less pasta than its North African neighbours due to misplaced consumer beliefs that it is not nutritious.
Millers have requested support from Cereals Canada to help dispel that myth.
Indonesia is the second largest market for Canadian non-durum wheat, with an average of two million tonnes in annual purchases, or 11 per cent of total exports.
Demand is growing in that market due to a growing population and expanding middle class. The country imported 2.4 million tonnes of Canadian non-durum wheat in 2024 worth more than $900 million.
Indonesia recently completed negotiations on a free trade agreement with Canada.
“The agreement certainly cements broad, tariff-free access for Canadian cereals into that market,” said Carlson.
He hopes the deal will be ratified by both countries in 2025.
Nemeth said shifting diets are also responsible for demand growth in that market.
“Many Indonesians are opting for wheat-based products for breakfast through bread products instead of their traditional rice-based meals,” she said.
Instant noodles made with CWRS wheat are also gaining popularity as a cheap alternative to rice.
Bangladesh is another growth market. In 2024, it imported more Canadian wheat than it had in 30 years.
Domestic production is not keeping up with consumption in that market. As well, the construction of a new large flour mill in the country was recently announced.
Bangladesh typically imports about 1.1 million tonnes of Canadian non-durum wheat per year. It is mostly No. 2 CWRS used for blending with lower protein wheat from Russia and Ukraine.
The country’s high temperatures and high humidity have created storage challenges for Canada’s wheat, which has high moisture content compared to competing wheats.
Cereals Canada has hosted webinars on what mills in that country can do to help maintain the quality of the wheat in storage. It has also published a milling guide in Bengali to help address those concerns.
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Source : The Western Producer
