Bangladesh becomes major customer of Canadian crops

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Four countries bought more than $1 billion of Canadian grains, oilseeds and pulses in 2019.

The top three are the usual suspects - China, Japan and america. But the fourth you can raise a few eyebrows.

Bangladesh bought $1.08 billion of Canadian wheat, canola, peas, lentils and other crops this past year, according to Statistics Canada.

That is a massive increase over the $438 million it imported in 2018.

“It’s a good news type of statistic,” said Wade Sobkowich, executive director of the Western Grain Elevator Association.

“Because it signifies that we’re in a position to find new markets for our products and that’s what’s happening.”

China topped all buyers with $2.63 billion of crop purchases from Canada despite erecting several barriers which have hampered trade between your two countries.

But that's well below the $6.48 billion it bought in 2018.

Exporters experienced to find other markets ready to take more Canadian crops and Bangladesh stepped up in a major way.

According to the Canadian International Merchandise Trade Database, which uses slightly different numbers than the aggregate totals in the above list, Bangladesh purchased $406 million of Canadian wheat in 2019, so that it is the fourth biggest buyer of the commodity.

It imported $351 million of peas and lentils, which is nearly three times as much as it bought in 2018.

And it gobbled up $369 million of Canadian soybeans and canola in 2019, a seven-fold increase over the prior year.

Sobkowich said there keeps growing demand for foods in the market.

“They have a vast population and an enormous potential market for grain products,” he said.

But their population isn’t doubling, tripling or growing by seven-fold in one year. So there is another thing at the job. Some reports suggest it's the country’s proximity to India.

India started positioning tariffs and quotas on a wide selection of imported crops in late 2017 in order to boost domestic charges for its farmers.

Bangladesh shares a border with India and there are reports that it and other neighbouring countries are importing pulses and then illegally smuggling them over the border duty-free.

A tale that ran in India’s Business Standard newspaper in the fall of 2019 said that India’s Border Security Force seized three boats from Bangladesh packed with smuggled peas on the Myntdu River, while two more escaped and fled back to Bangladesh.

That illegal activity appears to be continuing, according to recent reports from IGrain India, an agri-market research firm.

“The Indian pulses industry has expressed serious concern over the large-scale smuggling of pulses from neighbouring countries such as Myanmar, Bangladesh and Nepal and has asked the federal government to curb it,” stated IGrain director Rahul Chauhan in a recently available article.

“Industry says that this smuggling is leading to huge losses to entrepreneurs, traders and farmers.”

Indian traders who are importing pulses legally can’t contend with the smuggled product that's dodging government-imposed duties. Smuggled product has been sold below the government’s minimum support prices, according to IGrain.

Sobkowich does not have any idea if Canadian crops are being smuggled into India though Bangladesh.

“It could very well be,” he said.

“It wouldn’t surprise me, let’s put it that way.”

Peter Hall, chief economist of Export Development Canada (EDC), believes the increased trade with Bangladesh also has a lot to do with Canada’s trade troubles with China.

“When you get an abrupt cancellation of Canadian shipments of any agricultural commodity to market as large as China, you’re likely to create a variety of distortions,” he said.

EDC immediately started identifying alternative markets for Canadian products in the wake of China erecting trade barriers for canola and pork.

“Two of the markets in the region that popped up straight away through our analysis were Pakistan and Bangledesh,” he said.

Canadian crop sales to Pakistan were $488 million in 2019, up from $343 million in 2018.

He believes other exporters have rerouted product to China from Bangladesh and Pakistan and Canada is filling the void in those two markets, but it is too early to confirm that hypothesis for the reason that trade data isn't yet available.

Sobkowich said farmers better get used to topsy-turvy grain markets.

“We’re in a different world now. Our thinking on markets has really been stretched,” he said.

“We have exporters that want to get opportunities, looking all over the place.”
Source: https://www.producer.com

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