Image from FCC

By Chris Brown

Growth and diversification

Opportunities in food exports, says Farm Credit Canada

Nov 17, 2020 | 11:37 AM

Farm Credit Canada is touting the food and beverage processing industry as one of the country’s biggest opportunities for growth in global trade.

In 2019, Canada’s total food, beverage and commodity exports were worth roughly $67 billion, an increase of almost 10 per cent since 2015, states a release from FCC. Food exports increased by 27.8 per cent. Food and beverage exports represented less than half (45.5 per cent) of the total value of the country’s agriculture, food and beverage exports.

Canada’s agri-food industry has so far been able to adjust to COVID-19 challenges and meet the needs of Canadian and export customers, yet the disruptions to global food supply chains and trade caused by the pandemic underscore the need for Canada to diversify its export markets and seize related growth and diversification advantages.

“World population growth, higher purchasing power in emerging markets and new trade agreements are key factors in potentially creating more opportunities for Canada to increase exports,” said J.P. Gervais, FCC chief agricultural economist, in releasing this year’s trade report, titled Opportunities and Challenges to Diversify Canada’s Food Exports. “Combined with our competitive advantages in natural resources and innovation, and a stellar food safety reputation, Canada has an opportunity to improve its world standing as a major food exporter, as well as to diversify its export markets,” Gervais said.

Among the findings in the report:

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• Of all vegetable oils, canola oil has been the fastest-growing behind coconut oil. Imports largely used for consumption (as opposed to biofuel) show a definite preference for Canadian canola oil in multiple Asian and Western economies.
• Beyond China, most of the markets in which Canadian pork has an advantage are small and well-established with slow recent growth. If Chinese markets were excluded, the markets that show the greatest potential for Canadian pork exports are the European countries of Italy, France, Germany, Belgium and Poland.
• In 2019, Canada was the fourth-largest exporter of potato products, worth just over $1 billion. The expansion of the Western diet globally has increased demand for French fries and potato products. While the United Kingdom is the largest and fastest-growing importer, there is opportunity for expansion with other trading partners, such as Western and Eastern European countries and China.
• From 2009 to 2019, Canada has been the world’s largest exporter of prepared crab, capturing 32.8 per cent of total global exports last year. China, along with South Korea, Indonesia, Vietnam, Thailand and Hong Kong, represent a third of the global import growth.
• Global prepared and preserved beef imports grew by 58 per cent between 2009 and 2019, and China accounted for almost 40 per cent of that growth. Over the same period, Canadian exports grew by almost 125 per cent. Last year China surpassed the U.S. as the largest beef importer, including prepared and preserved beef. Other growth opportunities reside in Europe and other Asian export destinations.

Gervais notes that seeking and developing new markets can be expensive, but that increased markets means exports can be redirected rather than stopped when certain markets are cut off.