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Trade Talks Benefit Wheat, Pulses

The Government of Canada recently announced the start of free-trade negotiations with Morocco, a crucial market for exports of high-quality durum wheat and green lentils.

Western Canadian farmers now supply 80 per cent of the durum imported by Morocco, according to Ian White, CEO of the CWB. He says a free-trade agreement with Morocco will put Canadian farmers on an equal footing with their major durum competitors. The United States is in the sixth year of a 10-year implementation period of its own free-trade agreement with Morocco. The American deal provides an increasing tariff advantage for U.S. durum into this important market.

Durum makes up 92 per cent of the value of Canadian agricultural exports to Morocco, which account for the majority of Canadian exports to that country. The CWB exports an average of 525 000 tonnes of durum each year to Morocco. This consists almost entirely of top-quality No. 1 Canadian Western Amber Durum, which is highly valued for couscous, pasta and bread, according to the CWB.

GREEN LENTIL AND PEA MARKET

The launch of free trade negotiations between Morocco and Canada is excellent news for Canadian pulse producers and exporters, as well. The pulse industry is looking to achieve market access parity to ensure Canada remains competitive in one of the top five global markets for green lentils.

“During a 2009 visit, Moroccan importers told us they want access to Canadian product and continued competition between suppliers,” David Nobbs, chair of Pulse Canada, said in a recent press release.

A 2006 U.S.-Morocco trade agreement eliminated import duties for U.S. pulses entering Morocco over a 10 to 18 year period. Without a Canadian agreement in place, Canadian lentils will face a 50 per cent tariff disadvantage. Canadian peas currently face a 25 per cent tariff disadvantage, compared to U.S. peas. At current market prices of around $1,000 per tonne for lentils, Moroccan tariffs would eventually add $500 to the cost of Canadian lentils, eliminating exports to Morocco.

Canada exports more than 26,000 tonnes of pulses to Morocco each year, representing a $15 million market for Canadian producers.

AGCanada.com

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