Prairies to be biggest winners of federal infrastructure money

KENNEY CAN QUIT WHINING NOW

By D.C. Fraser, Glacier FarmMedia

Published: October 2, 2020
Crops, News

On Oct. 1, the federal government launched a $10 billion infrastructure plan over three years aimed at five different sectors, including agriculture. The $1.5 billion is expected to result in 700,000 acres of irrigated land. | Mike Raine photo

Prairie provinces will receive the bulk of Ottawa’s $1.5 billion commitment to support irrigation projects, according to federal Minister of Agriculture Marie-Claude Bibeau.

On Oct. 1, the federal government launched a $10 billion infrastructure plan over three years aimed at five different sectors, including agriculture. The $1.5 billion is expected to result in 700,000 acres of irrigated land.

Members of the Liberal Party of Canada say the investment, being funnelled through the Canada Infrastructure Bank, will create 60,000 jobs.

“The 1.5 billion that is dedicated to agriculture will most likely be dedicated to the Prairies and the West, because we are targeting major irrigation projects and I think there are opportunities for investment in this sector in the Prairies and this is why the bank has already started significant discussions with the provinces, the municipalities, the private sector to see how we could move forward,” said Bibeau. “Most probably, the Prairies will benefit the lion’s share from this part of the investment.”

She stopped short of mentioning specific projects, but Saskatchewan’s $4 billion Lake Diefenbaker irrigation project is a top candidate to receive federal support.

Saskatchewan’s government announced earlier this year plans to spend 10 years working on the project that would allow farmers to irrigate 500,000 acres.

In September, the federal Western Economic Diversification Canada agency recommended Ottawa help fund the Diefenbaker irrigation project, contending the completed project would add $85 billion to Canada’s gross domestic product and $20 billion in tax returns back to government.

While targeted to the agriculture sector, the project is also expected to be beneficial for the potash industry.

Adding to the likelihood of federal support is the role former Liberal cabinet member and Saskatchewan MP Ralph Goodale continues to play within party circles, he is a long-time advocate for the project and a respected voice in party circles.

Scott Moe, who is running in the current Saskatchewan election to continue to serve as premier, said he was given a heads-up on the announcement.

“I hope this is positive news. There is some money ear-marked for the irrigation project, irrigation projects,” he told reporters in Regina. “We have a significant irrigation

investment that will be coming here in the province of Saskatchewan.”

“We will be looking at the details of this very soon,” he said, adding he hopes it is an investment rather than a loan through the infrastructure bank.

Ottawa’s announcement also contained a $2 billion commitment to expanding high-speed broadband access. In the recent Throne Speech, the government said it wanted to improve internet access in rural and remote communities.

The Canadian Federation of Agriculture said in a news release it was “encouraged” by the funding announcement.

“Rural broadband has been a long-standing issue for Canada’s farmers and rural communities. With the arrival of COVID-19, many services pivoted to become entirely online, highlighting the fact farmer’s lack of high-speed connectivity puts us at a significant business disadvantage.

“Rural broadband is not only necessary for today’s farmers to conduct business and take advantage of cutting-edge technology, it is also critical to attracting new, young farmers into the industry,” said CFA president Mary Robinson in a statement.

 

Mauritius oil spill cleanup efforts gets funding boost

By

Shem Oirere

October 1, 2020

Weeks after the Mauritius government ordered fishermen to keep away from the country’s beaches and lagoons due to the oil spill that has impacted the coastal Blue Bay, the African Development Bank (AfDB) has announced a USD 500,000 (EUR 429,118) emergency assistance grant to support international recovery efforts in cleaning up the oil spill that has drawn global attention.

Mauritius, which has one of the largest Exclusive Economic Zones of all countries in Southern and East Africa at 1.28 million square kilometers, is likely to utilize the bank’s financing in support of ongoing cleanup operations to pave the way for a quick resumption of fishing operations and other blue economy activities.

The oil spill incident involved a Japanese vessel, MV Wakashio that spilled nearly 1,000 metric tons of oil off the coast of Mauritius last July.

The bank says the funding, which has been drawn from the Special Relief Fund, “will complement ongoing activities by the government of Mauritius, development partners, and other actors to undertake salvaging and cleaning operations, conduct damage and loss assessments, along with other socio-economic evaluations.”

According to AfDB’s Director for Agriculture and Agro-industry Martin Fregene, the grant “is an important contribution to the International Recovery effort towards restoring the pristine marine ecology, so important for livelihoods in the blue economy and tourism sectors, which is now threatened by the unfortunate oil spill.”

Meanwhile, international non-governmental organization, the World Wildlife Fund (WWF), had previously termed the oil spill “tragic and preventable incident.”

It said the Mauritius tragedy joins growing list of marine accidents in the Southwestern Indian Ocean region, “including a phosphate spill in southern Madagascar in August 2009, and the mass stranding of dolphins in 2008 following underwater seismic sounding by Exxon Mobil in northwestern Madagascar.”

 “This oil spill is a severe threat to critical ecological resources, including coral reefs, fish, and other coastal and marine life of the southeast coast of Mauritius,” WWF Madagascar Country Director Nanie Ratsifandrihamanana said in a release. “The impact on 2,300 artisanal fishermen and women and the 1.5 percent of Mauritius’ GDP derived from the fishing industry are devastating.”

Although Mauritius is yet to avail precise data on the impact of the oil spill on its fishing industry, the incident comes at a time when the country, with a per capita fish consumption of 23.2 kilograms per-person per-year, is implementing a raft of measures to harness its blue economy potential.

For example, Finance, Economic Planning and Development minister Dr. Renganaden Padayachy recently said Mauritius will, in the 2020/2021 financial year, focus on wooing investments in joint ventures engaged in fishing activities and its value chain as part of its post COVID-19 recovery scheme. The country is also finalizing plans to set up an inland aquaculture scheme that comes with an 8-year tax holiday and exemption on payment of duties and VATs on imported aquaculture equipment.

Mauritius has also increased the daily rate of the bad weather allowance to fishermen from MUR 365 (USD 8.90 EUR 7.70) to MUR 425 (USD 10.40 EUR 8.90).

During the 2019/2020 financial year Mauritius announced plans to set up an “online and physical fish auction market will be set up to act as an interface between local fishermen, fishing companies and buyers both local and international.”

Mauritius is also seeking to “consolidate and diversify our fisheries and seafood industry” through a stock assessment “to better manage and protect species such as lobsters, squid and other small commercial pelagic fish.”

Photo courtesy of International Maritine Organization

Shem Oirere

Contributing Editor

 shem@shemoirere.com

RUSSIA

Norilsk Nickel has estimated the costs of eliminating the consequences of the accident at 12 billion rubles

THERE ARE NO 'ACCIDENTS' 

THEY ARE PREVENTABLE INCIDENTS

 by Bhavi Mandalia September 30, 2020


Norilsk Nickel spent about 12 billion rubles to eliminate the consequences of the accident at TPP-3 in Norilsk. This was announced on Wednesday, September 30, by the company.

“The company currently estimates the total cost of cleaning at about 12 billion rubles (about $ 150 million),” – leads TASS Message text.

On September 15, Norilsk Nickel presented a plan for reclamation of lands damaged after the fuel spill near Norilsk. As a result of reclamation, it is planned to restore the land to a state that meets the requirements of Russian legislation.


On the same day, Andrei Grachev, Vice President of PJSC MMC Norilsk Nickel, said that 400,000 sq. M. Were processed in the framework of the emergency response in Norilsk. m of the territory of the pollution zone.

The accident at TPP-3 in Norilsk occurred on May 29. About 20 thousand tons of fuel spilled due to the depressurization of the diesel storage tank, which occurred against the background of a sudden subsidence of the supports. Oil products got into two rivers – Ambarnaya and Daldykan. After that, a federal emergency was declared in the incident zone, and the liquidation of the accident began.

On the fact of the incident, several criminal cases were initiated at once, which were combined into one proceeding. In particular, we are talking about cases of violation of environmental protection rules during the performance of work (Art. 246 of the Criminal Code of the Russian Federation), damage to land (part 1 of Art. 254 of the Criminal Code of the Russian Federation) and water pollution (Art. 250 of the Criminal Code of the Russian Federation).

In early August, Norilsk Nickel presented to the Public Chamber of Russia a draft of a plan to eliminate an emergency with a fuel spill in Norilsk, developed jointly with a commission under the Ministry of Natural Resources. The document provides for work until 2025. At the same time, the metallurgical company announced its plans to challenge the amount of damage, while confirming its obligations to eliminate the consequences of the accident at its own expense.

 Pebble probe: Cantwell calls on US Justice Department to investigate

By

National Fisherman

October 1, 2020

U.S. Senator Maria Cantwell (D-Washington) called for a federal investigation of the testimony and documents submitted by Pebble Partnership CEO Tom Collier and other executives in support of the proposed Pebble Mine in Alaska's Bristol Bay region.

On Tuesday, 29 September, Cantwell called for a Justice Department investigation into possible discrepancies between comments made by Collier and Donald Thiessen, president and CEO of Pebble's parent company Northern Dynasty Minerals, on a series of recorded video calls and how they characterized the project’s scope and plans in legally binding federal documents, as well as in congressional testimony. 

The Pebble Tapes, as they are being called, resulted in Collier's resignation as CEO of the Pebble Partnership. 

“The Pebble Tapes make one thing very clear: The Pebble Limited Partnership will stop at nothing to build their disastrous mine, even if it means lying on their permit application, deceiving their investors, or possibly perjuring themselves in front of Congress," Cantwell said in a statement released on Tuesday, 29 September. "The Department of Justice should investigate what is disclosed in these disturbing Pebble Tapes."

Collier testified at a House Transportation and Infrastructure Committee hearing in October 2019 that “Pebble has no current plans, in this application or in any other way, for expansion."

The tapes, however, "reveal Pebble’s apparent plans to use the infrastructure included in its mine plan to open up other expansive [swaths] of western Alaska to mining, including through the activation of the Donlin Mine, a project that already has federal permits and could become economically viable overnight if the Pebble project is approved," the Environmental Investigation Agency said when it released the tapes.

“Bristol Bay is grateful for Senator Maria Cantwell’s call for action. She continues to be a much appreciated champion for our fishery," United Tribes of Bristol Bay Executive Director Alannah Hurley said.

Hurley testified at the same October 2019 hearing that is now under scrutiny. Collier also submitted written testimony for the hearing. 

In response to the Pebble Tapes, U.S. Sens. Lisa Murkowski and Dan Sullivan (both R-Alaska), denied silently acquiescing to the project, as suggested in the recordings. Alaska Governor Mike Dunleavy, also a Republican, said Collier and Thiessen had "embellished their relationships with state and federal officials."

However, none of Alaska's delegation has called for further action in response to the tapes, and neither senators' offices responded to requests for comment by press time.

Cantwell's call for an investigation "makes the inaction of our own Alaskan senators even more notable and disappointing, their words are meaningless without action," Hurley added. "We need them to step up now for Alaskans and act to stop this toxic mine from devastating the Bristol Bay fishery.”

This is not the first time Cantwell has called for an investigation into Pebble. In 2013, she requested the Securities and Exchange Commission investigate whether the company misled investors with contradictory statements in company filings. In January 2014, she called on the administration of former U.S. President Barack Obama to protect Bristol Bay after a report showed the proposed mine would threaten salmon runs, thereby and damaging the region's commercial, subsistence, and recreational fishing sectors. Those protections were drawn down under the Trump administration, which allowed the permitting process to continue.

Photo courtesy of Jerry Fraser/National Fisherman

National Fisherman

National Fisherman is an online resource for commercial fishing professionals, providing access to the latest news and information about the commercial marine industry in a single place.

 

Premier Fishing SA sells shares to staff, community

By

Shem Oirere

October 2, 2020

Cape Town, South Africa-based seafood company Premier Fishing SA, an affiliate of listed Premier Fishing and Brands Limited, has issued 30 percent of its total share capital to more than 900 of its employees, and to fishing communities in selected areas where the firm operates.

The transaction, which the company describes in a media statement as one of the “largest of its kind in South Africa and in the fishing sector,” would see 20 percent of the allocated shares attributed to employees share trust, while 10 percent has been assigned a Black Economic Empowerment (BEE) consortium through a special-purpose vehicle for the benefit of employees residing in “Saldanha Bay, Cape Town, Hout Bay, Gansbaai, and Port Elizabeth.” The BEE is an integration program launched by the South African government to reconcile South Africans and redress the inequalities of apartheid.

According to Premier Fishing SA CEO Rushaan Isaacs, the transaction, which will likely be completed in 14 days, would enable the company and its employees “to share the profits of our combined efforts through this share scheme.”

“I am delighted that we now have the opportunity to be shareholders in Premier and be custodians of its brand and business into the future,” she said.

The Premier Fishing and Brands Group, which previously reported adverse effects of COVID-19 on its financial performance, is focused on commercial fishing, fish processing, marketing and sales to local and international clients with preference for markets in the Far East, Europe, and the United States.

The share transfer comes soon after Premier Fishing SA, which deals in seafood products such as lobster, octopus, squid, pilchards, anchovies, hake, and horse mackerel, as well as an abalone aquaculture venture, reported a decline in revenues in the first quarter of 2020 as global seafood prices fell.

In the first quarter of 2020, Premier Fishing reported revenue decline to ZAR 215 million (USD 12.9 million, EUR 11 million) from ZAR 287 million (USD 17.2 million, EUR 14.7 million) a year previously. The company also reported a decrease in both gross profit and profit after tax to ZAR 80 million (USD 4.7 million EUR 4 million) and ZAR 20 million (USD 1.2 million, EUR 1 million) down from ZAR 137 million (USD 3.2 million, EUR 6.9 million) and ZAR 55 million (USD 3.2 million, EUR 2.7 million) respectively.

However, the company said it is currently “expanding, and has one of the largest and most advanced environmentally friendly abalone farms, which is situated in Gansbaai, with an annual production output of approximately 190 tons, which it markets in China, Hong Kong, and Taiwan.”

The company’s outlook warns of uncertainty in the global seafood market because of prevailing inability to predict when COVID-19 will be brought under control and have markets return to normal.

Premier Fishing SA’s major shareholder, African Equity Empowerment Investments, said it supports the staff and community staff transfer transaction saying the deal is “an excellent display of doing good business whilst empowering and rewarding the employees and communities that help Premier realize its excellent business results.”

“When a company takes care of its employees and its communities, the financial success will follow,” African Equity Empowerment Investments CEO Valentine Dzvova said.

Despite the 2020 trading challenges exacerbated by the COVID-19 outbreak, Premier Fishing SA is optimistic the new share transaction “would provide employees and fishing community members with a say in the strategic direction of the growth of the company in the future.”  

Photos courtesy of Premier Fishing, African Equity Empowerment Investments

Shem Oirere

Contributing Editor

 shem@shemoirere.com

 

La Nina could ruin South America’s big crop hopes

By Sean Pratt

Published: October 1, 2020
Markets

South American farmers are expected to produce 199 million tonnes of soybeans this year. | File photo

Weather system can bring dry weather to Argentina and Brazil, which are expecting record corn and soybean harvests

La Nina could take the top off of what is shaping up to be a record 2020-21 crop of South American corn and soybeans, says an analyst.

Michael Cordonnier, publisher of the Soybean & Corn Advisor newsletter, forecasts 199 million tonnes of soybean production for the region, up from 190 million tonnes last year.

His corn estimate is 166.1 million tonnes compared to 157.7 million tonnes last year.

However, both of those sharp increases could be erased by a developing weather event.

The United States National Oceanic and Atmospheric Administration recently declared that a La Nina climate pattern has developed and is likely to persist through February 2021.

La Nina tends to result in dry weather for Argentina and southern Brazil, which could negate the production gains Cordonnier is forecasting.

“We could end up with no bigger production than last year,” he said.

“We could easily lose the nine million tonne increase in soybeans and the eight million tonne increase in corn if you have a severe La Nina.”

The Buenos Aires Grains Exchange took it one step further. It now forecasts a reduction in Argentina’s corn and soybean crops compared to last year.

It estimates a soybean crop of 46.5 million tonnes, down from 49.6 million tonnes and a corn crop of 47 million tonnes, a decrease from 50 million tonnes.

Cordonnier said La Nina has no impact on crops in central and northern Brazil. In fact, there tends to be more rain in the north.

It is extremely rare to have drought in Brazil’s top soybean producing state of Mato Grasso, which is in the rainforest region of the country.

“I mean, it can rain twice a day every day for the month of January,” he said.

However, La Nina could have a significant impact on the southernmost state of Rio Grande do Sul, which is the country’s third largest soybean producing state.

Rio Grande do Sul suffered a severe drought in 2019-20 and can ill afford a second consecutive year of dry weather.

Farmers in Brazil were “tickled pink” with last year’s record corn and soybean prices and exports, largely due to the 35 percent devaluation of the country’s currency, he said.

“Agriculture in Brazil is on a roll.”

Stocks of corn and soybeans are “very, very tight” to the point where the government may decide to drop its import tariffs sometime before the end of 2020.

Brazilian growers are expected to respond by expanding soybean acres by 4.3 percent and corn acres by 6.5 percent. The acres will come from pastureland and sugarcane, not rainforest as some are falsely reporting, said Cordonnier.

Dry seeding conditions could cause soybean planting delays in southern Brazil. Delays are not a big deal. Yields can be the same whether farmers plant in mid-September or mid-November.

However, if the soybean crop is delayed, it could impact planting and yields for the country’s second crop of corn, which now accounts for three-quarters of Brazil’s corn production.

It could also create a longer sales window for U.S. and Canadian soybean exports.

Cordonnier said the weather has been dry in Argentina for the past four of five months, which is having a significant impact on the country’s wheat crop.

The government of Argentina has raised export taxes on grain and soybeans, causing farmers to hold the crops as a hedge against inflation. Crushers in the country are operating at 50 percent capacity.

He doesn’t anticipate any acreage increase for either crop in that country.

FRANCE 

Peasant unions unanimous against free trade

by Bhavi Mandalia
September 30, 2020

In recent days, criticism against the free trade agreements signed between the European Commission and Canada, then with the Mercosur countries, has become increasingly fierce in France. Very critical of the economic and ecological consequences of the agreement between Europe and Mercosur, the report of the Commission chaired by Stéphan Ambec and submitted to Prime Minister Jean Castex on September 18, prompted the reaction of many peasant trade unionists as well as certain professionals of the meat industry in France. In a joint press release, the FNSEA and the Young Farmers union say they are “comforted by the Ambec report which confirms that the enormous difference in terms of production standards would lead to unfair competition for certain key sectors of European production. The conclusion is simple, the import of agricultural products from Mercosur would jeopardize the viability of entire sections of French agriculture, ”believe these two unions.
For a differential treatment of the agricultural sector

In another paragraph of their joint press release we can read this: “it is the very concept of free trade agreements that must be reviewed to promote regulated trade, differential treatment of the agricultural sector and allow all countries of the world solidarity in food sovereignty ”. The FNSEA has not always used this language in the past. We can therefore think that the experience of the peasant world in recent years has also made the union activists of the specialized associations of the FNSEA reflect in the various production sectors.

The second union in the country with electoral influence, the Rural Coordination delivers its findings through the voice of its president Bernard Lannes: “The EU-Mercosur agreement provides for increasing imports of meat, sugar and soybeans from the Mercosur countries. , the production of which is industrializing strongly due to the aggressive orientation towards exports ”. Opposite, he continues, “peasants in Europe face significant challenges in producing food in a way that respects the climate and animal welfare, which leads to increased costs for farms. However, the increasing and unskilled imports from Mercosur countries intensify the pressure on costs for farming families and European peasants ”. Like the FNSEA and the JA, the Rural Coordination is opposed to the ratification of this agreement, which is also the case for the Confédération paysanne and MODEF from the start.

Suspend the provisional application of CETA

The FNSEA specialized union in the production of beef cattle, the National Bovine Federation (FNB) believes in a press release that “an immediate halt must be given to this free trade policy!” Whatever the commercial issues, the EU must no longer authorize the importation of products that do not strictly meet European production standards (…) The provisional application of CETA must therefore be suspended. The agreement with Mercosur must be rejected from the first stage of ratification, i.e. the vote for its signature by the Member States, in the Council of the EU, which the former European Commissioner for Commerce had announced for the month of October, ”recalls the FNB.

Irish national Phil Hogan had become commissioner in charge of trade in the new commission after having been an incompetent commissioner in charge of agriculture in that chaired by the Luxembourger Jean-Claude Juncker. In August he was led to hand in his resignation to Ursula Von der Leyen after attending a gala dinner for 80 people in Dublin in contradiction with the sanitary rules of the moment.
France must reject these two agreements

Farmers and their unions are not alone in opposing these free trade agreements. The Cattle and Meat inter-profession known by the acronym “Interbev” writes this in a recent press release: “on reading the report on CETA, the inter-professional organization considers unacceptable the many failures highlighted by the European Commission on the systems of Canadian meat traceability. It is clear that this system of traceability and control of meat exported by Canada to the European Union does not guarantee to date that these meats are hormone-free and anabolic-free ”.

While the Senate has just been partly renewed, it now has solid arguments for not ratifying CETA, this free trade agreement signed between Europe and Canada and approved in 2019 by a vote of the Assembly. national when the LaREM group was still in the majority.

Gerard Le Puill

US Trade Commission hears testimony on CETA's impact on US lobster exports

Steve Bittenbender October 1, 2020  SeafoodSource News

The U.S. International Trade Commission heard testimony Thursday, 1 October, on the effect the trade agreement between Canada and the European Union has had on America’s lobster industry.

The Canada-E.U. pact, known as the Comprehensive Economic and Trade Agreement (CETA), has had a detrimental effect on U.S. lobstermen and exporters since it took effect three years ago, according to Robert DeHaan, the vice president for government affairs for the National Fisheries Institute. DeHaan said the deal meant U.S. exporters faced 8 percent tariffs on live lobsters and up to 20 percent on value-added products while their Canadian counterparts paid no levies on the same products, providing them with a significant competitive advantage.

That is expected to change as the E.U. and U.S. reached a deal on 21 August to remove the tariffs from lobster products. The five-year deal, retroactive to 1 August, awaits some final changes, but DeHaan said it is welcome news for lobstermen and businesses that have endured other hardships this year with the COVID-19 crisis.

Both DeHaan and U.S. Senator Susan Collins (R-Maine) said in prepared remarks that the USITC also needs to be looking into other trade deals to help the lobster industry. Their top recommendation is a targeting of China for a deal, where again Canada has been able to overtake the U.S. because of friendlier tariff rates, while the Sino-U.S. trade war initiated by U.S. President Donald Trump has resulted in lobster and many other U.S. seafood products facing higher tariff rates than four years ago.

“It is vital that our government support the efforts of the U.S. lobster industry to access new consumers and markets overseas,” Collins said in her statement. “I will continue to advocate for a level playing field for Maine’s lobster industry.”

DeHaan also added that the U.S. Trade Representative should pursue a free-trade agreement with Great Britain that mirrors the E.U. pact and also include other seafood products, such as whitefish, salmon, and shellfish. However, he cautioned that British officials seem intent on maintaining some of the old E.U. policies.

“Here, nevertheless, is the perfect opportunity for the administration to secure fair and reciprocal trade for those exporters, in an agreement with a developed nation whose consumers need no introduction to premium American finfish and shellfish products,” DeHaan said.

In addition to Thursday’s hearing, the USITC is still taking written submissions through 16 October. Those documents must be filed through the commission’s electronic system.

Photo courtesy of Maine Lobster Marketing Council

 

U.S. wheat growers hit sales jackpot in China

By Sean Pratt

Published: September 24, 2020
Markets

Canada could sell wheat to the United States if that country drained supplies while meeting Chinese demand, but large carryout and a good quality crop south of the border makes that unlikely. | File photo

Increased exports are attributed to the trade agreement signed by the two countries, but Canada is unlikely to benefit from that development

The United States has been selling wheat to China like gangbusters in early 2020-21.

There is already 1.47 million tonnes on the books as of Sept. 10, a 2,357 percent increase over year-ago levels.

“China is definitely in the market,” said U.S. Wheat Associates (USW) spokesperson Steve Mercer.

“We have to chalk that up to Phase 1, there’s no doubt.”

In the Phase 1 trade deal with the U.S., China committed to buy an additional US$32 billion of U.S. agricultural products over 2017 baseline levels in 2020 and 2021.

It appears wheat will be one of the beneficiaries of that deal.

This year’s purchases between June 1 and Sept. 10 are already approaching full-year levels in the pre-trade war era when China bought 1.6 million tonnes of U.S. wheat in 2016-17.

China has rapidly become the second biggest buyer of U.S. wheat so far this marketing year after barely buying any last year.

Sales include 921,000 tonnes of hard red winter wheat and 380,000 tonnes of hard red spring wheat.

Mercer said there is no doubt that Chinese millers are in need of high quality wheat. If it was up to them imports would be even higher but the government is in control of the wheat trade.

Bruce Burnett, analyst with MarketsFarm, said Canadian growers are unlikely to benefit from the re-emergence of China as a big buyer of U.S. wheat.

If the U.S. had tight supplies of spring wheat Canada could fill the void left by U.S. wheat flowing to China, but the U.S. Department of Agriculture estimates 7.6 million tonnes of U.S. hard red spring wheat was carried out from 2019-20, which is well above the previous five-year average.

And this year’s crop was of good quality, so U.S. millers have plenty of supply.

Canadian wheat sales to the U.S. have been down in recent years. Exports that were as high as four million tonnes per year in the last decade fell to two million tonnes last year.

That could change if China buys copious amounts of high quality U.S. wheat, but Burnett said China doesn’t need wheat as badly as it needs U.S. corn and soybeans.

China is expected to end 2020-21 with 164 million tonnes or 51 percent of world wheat stocks.

He believes the only reason China is buying wheat is to help meet its Phase 1 commitments and to refresh its stockpile.

“If you’re carrying those massive stocks, you do have to rotate them,” said Burnett.

The newly imported wheat will likely replace supplies that were imported a few years ago and that older grain will be injected into the Chinese market.

Burnett is reticent to guess how much U.S. wheat China will import by the end of the year because the purchases are tied to the Phase 1 agreement, which has been a volatile pact.

“A lot of it will depend on the whims of politics,” he said.

The U.S. recently won two World Trade Organization disputes regarding China’s wheat import policies.

China has agreed to work toward filling its 9.6 million tonne tariff rate quota (TRQ) for wheat imports.

USW believes Chinese millers would fill most of that TRQ if they were allowed to properly respond to market signals.