FCC trade report shows strong agricultural and food exports in 2020

Despite a global contraction in agricultural exports, 2020 has been a relatively good year for Canadian agricultural and food exporters, according to the latest trade report from Farm Credit Canada (FCC).

“Canada’s agriculture and food industry has been resilient in these difficult times and has the potential to emerge even stronger from this pandemic as our producers, agricultural product manufacturers and food processors begin to recover from the disruption caused by the pandemic, ”said JP Gervais, FCC’s Chief Economist, in releasing this year’s business report.

“That doesn’t mean that there aren’t challenges down the road ahead,” he said. “The value of the Canadian dollar is always an important factor in determining our trade competitiveness and market access can sometimes be undermined by geopolitical tensions or supply chain disruptions, as we have seen with the pandemic. ”

The report shows that Canada recorded the largest year-over-year increase in agricultural exports at 13.8%, while all agricultural exporting countries combined saw their product exports contract by 9%, largely due to the impact of the pandemic during most of 2020. With 5.5 percent of total world commodity exports, Canada was the fifth largest exporter in the world, a position that it has been in business since 2012. The United States remained the world’s largest supplier of commodities, followed by the Netherlands, China and Brazil.

Canada is yet to be among the top 10 exporters of processed food products, but has gained ground since 2011, moving from the sixteenth to the eleventh exporter of food products. The United States has maintained its leadership role since 2012, followed by Germany, the Netherlands, France, Brazil, Italy, China, Belgium, Spain and the United States. ‘Indonesia.

Compared with the significant global contraction in commodity exports, total food exports were not as badly affected by the pandemic disruptions, falling only 3.7%. Nevertheless, the growth of total food exports over the past 10 years has been much slower, with average annual growth of less than 1%.

Meat is the largest category of Canadian food exports, averaging 13.4% of total food exports and one of the highest average annual growth rates in all sectors at 1.3% between 2011 and 2020 Drinks were the second largest category. , totaling 12.2 percent of food exports over the same period at an average annual growth rate of 1.1 percent.

Canada was able to increase its year-over-year share of global pork markets in 2020, in part due to a favorable exchange rate environment relative to our major competitors.

For agricultural products, Canada’s export success in 2020 came from oilseeds at 32.2 percent of total Canadian agricultural exports, while grains accounted for 28 percent. Of all grains, wheat was Canada’s top export, accounting for 80.9% of total grain exports last year. Canada has been one of the top three exporters of wheat to the world for the past 10 years.

This year’s FCC trade report focuses on the extent to which a simple comparison of the loonie against the US dollar is an accurate assessment of our global trade competitiveness.

The Canadian dollar has gained 1.4% against the US dollar since the start of 2021, which is the best performance among the G10 currencies, helped by rising commodity prices.

“The value of currencies is an important determinant of Canada’s overall trade performance,” said Gervais. “But we can’t look at the value of the Canadian dollar in isolation, because buyers look at the exporters’ basket of currencies when making import decisions. For example, Canadian beef and wheat exporters have seen a gain in the value of the Canadian dollar against the currencies of other major exporting countries over the past two years, making Canadian exports less competitive, all other things being equal. .

Due to rising energy prices, the report predicts that the value of the Canadian dollar will remain slightly above its present value of US $ 0.80 for the remainder of 2021 and into early 2022. The rise in Energy prices in Europe could also cause the value of the Euro to fall against the Loonie in the coming months.

Gervais notes that many factors at play will determine the future success of Canada’s exports, such as market access, the economic health of major importers, weather disruptions, or other challenges in global logistics or transportation.

“Beyond monetary values, the growth of the world population, higher purchasing power in emerging markets and new trade agreements are also key factors to potentially create more opportunities for Canada to increase its exports, ”he said. “By leveraging our competitive advantages in natural resources, innovation and an excellent reputation for food safety, Canada has the opportunity to strengthen and strengthen its position as a major agricultural exporter and food.

By sharing economic knowledge and forecasting, FCC provides solid knowledge and expertise to help agriculture and food professionals achieve their goals. For more information and perspectives on trade and its impact on Canadian agriculture, visit fcc.ca/Economy.

For a more in-depth look at the Canadian food and beverage industry, check out FCC’s biannual update.

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