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A few years ago we embarked on an initiative to export containerized grains to China, when trade-relations looked quite bright. We were puzzled by the fact that while China was still importing more than 4 MT of wheat, our exports that were 2 MT earlier were now less than 10% of that. Instead of wheat in bulk, China needed higher-grades delivered to newly modernized flour-mills in container-loads. We had plenty of what they were looking for (including durum) but not the capacity to ship in containers, at least not to multiple locations (newly built mega-mills) in weekly container-loads.

We also discovered a keen interest in importing already mixed container loads of animal feed to specific feed-lots -- China now imports more grains for feed than food, more than our total grain production. There was also interest in cereal-mixes for a huge breakfast market shifting away from rice to grains. We grew all the desired ingredients but lacked the capacity to ship to specific locations across the country, in regular container-loads. Our relations with China may be fatally wounded but these trades have not vanished, available indirectly through intermediary channels.

These are just a few examples based on our own experience -- more to be found under our Global Markets tab, together with our ongoing projects we will be publishing on in the near future. Despite all the trade-disputes, China still accounts for close to a fifth of our total grain exports. Volumes are likely to decline as China is increasingly turning to its west (Central Asia and Caucasia) for grain-imports. But specialty crop needs will prevail and likely to be met through re-export channels, while demand will remain strong from rest of Asia, particularly ASEAN members.

 

Our focus will remain on specialty grades of our staple-crops, particularly wheat, durum and barley -- we have the capacity to produce all the varieties the world needs, as long as we develop the means to ship direct in containers. At the same time, we have not exhausted our export-potential in pulses, which we have the best growth conditions for and already handle in containers. Though not even mentioned yet, there are many other crops we produce but export very little of, if any -- rye, flax, quinoa, mustard, canary-seed, buckwheat, camelina, to mention just a few.

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Demand for wheat in China

Through the reform-era China's wheat-output increased 5-fold but consumption even faster, with imports hovering in the 4-5 MT range in recent years.  When China's wheat imports peaked at 8 MT 15 years ago, our share was 25% but now that share is down to less than 10%.  We paid no attention to either food-consumption or flour-milling trends in China.  While their needs were shifting to specialty-grades to blend with domestic varieties, there was little demand for our bulk wheat-exports.

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Demand for meat in China

China's per capita meat consumption increased 5-times in 40 years -- pork higher but beef and poultry still much lower than North America.  Now China needs more than 300 MT of grain per year to meet its feed-requirements, about the same as for food.  This has been the main driver of China's rapid growth in grain-imports, more than 20-fold in 25 years.  In turn our grain-exports to China also increased but only 4-fold, not due to any wisdom on our part but desperate need on China's part.  

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Vegan-Vegetarian Diets

As noted already, we have now shifted our research agenda away from China to other areas.  High on our priority list is grain consumption trends driven by vegan and/or vegetarian diets.  These are not just "fads" but fundamental shifts taking place in dietary practices, driven by heightened health-consciousness -- not just in rich countries but also emerging ones, particularly under Buddhist influences in Asia.  We will be reporting on our progress on this front in the next few months. 

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Organic Agriculture

Another angle we have an interest in pursuing is organic-farming that adds further environmental and ethical dimensions to crop production -- free of artificial chemicals, instead using fertilizers and pesticides derived from natural sources.  There may be as many as 1500 certified organic farmers across the Prairies that can fetch higher value for their crops in export markets.  We can extend our marketing efforts into this domain if we can get sufficient interest from the producer-community.