One of the largest buyers of Canadian wheat has a problem with the quality of the product.
Peru purchased more than one million tonnes of Canadian wheat in 2017-18, making it Canada’s sixth largest customer.
“We normally don’t think of Peru as a strong export market but they are,” said Cam Dahl, president of Cereals Canada.
The South American country recently notified the World Trade Organization of changes in phytosanitary requirements for Canadian wheat shipments.
It has concerns about weed seeds in shipments, including ubiquitous ones such as ragweed.
“We’re not going to be able to guarantee that all Canadian shipments are free just because of how prevalent some of these weeds are,” said Dahl.
“It’s one of these issues that you just don’t expect to happen. One day you come to work and here’s an issue with a market that is importing over one million tonnes per year that could potentially close that market.”
Cereals Canada has been working with the Canadian Food Inspection Agency, the Canadian Grain Commission and the Canadian embassy in Lima, Peru, on the file.
And there appears to be some progress. Peru could have implemented the new policy on Aug. 1 but has decided to delay implementation.
“They have extended it into February, which is significant progress and a sign that we’re going to be able to work through this,” said Dahl.
“I think this is an issue that we are going to be able to resolve.”
Patrick Girard, a spokesperson for Agriculture Canada, said the Canadian Food Inspection Agency’s export certification procedures for Peru remain unchanged.
“The Canadian Food Inspection Agency is in communication with its Peruvian counterpart, the Servico Nacional de Sanidad Agraria, to discuss the phytosanitary requirements for Canadian wheat exported to Peru,” he said in an email.
“These discussions have been positive and collaborative.”
Girard said the CFIA will consult with industry if there are any changes to the export requirements.
Dahl said non-tariff trade issues like this are going to become more commonplace in the grain trade in the coming years.
Tariff wars are also becoming more popular, such as the spat between the United States and China.
That one has worked out well for the Canadian wheat industry. China bought more than one million tonnes of Canadian wheat in 2017-18, which is almost triple what it bought the previous year.
“We can put that down a little bit to trade uncertainty,” said Dahl.
He said you never like to rely on trade spats to boost market share in a country but on the other hand, once you establish new trade flows and relationships there is a tendency for them to stick.