Canadian Food Exports Profit

Posted by Daniel Workman Jun 26, 2008

Paul Waldie of Toronto's Globe and Mail points out that 80% of Canadian wheat is exported. So far this year wheat prices have increased by 50%, a trend that benefits Canada as one of the world's leading wheat producing countries.

Revenues from Canadian agricultural exports continue to hit all-time highs on the way to a record US$11-billion trade surplus this year.

At the same time, Canadians have experienced price increases for food imports, but not as high as those experienced in other countries.

Statistics Canada reports that Canadians paid an average of just 1.2% more for food during the 12 months ending April 30. That rise is 5 times lower than food price increases in America and 6 times lower than in Europe.

The world's most heavily populated country China has experienced a 22% increase in food prices.

So while Canadians are paying about 10% more for cereals and breads due to higher grain prices, cereals and breads represent just 12% of total Canadian food purchases. More meats, fruits and vegetables show up on Canadian food bills, and prices for those products have fallen. Why? Because a strong Canadian dollar has reduced imported vegetable costs by 13% and imported fruit prices by 4%. About 40% of vegetables and fruits that Canadians consume are imported.

Oil comprises only 5% of food prices, so any energy cost pressures are expected to be moderate.

Besides, Canadians are in the enviable position of being able to substitute different foods like potatoes should rice prices multiply. Populations in other countries depend on rice to survive, and therefore suffer the most as Canada's food exports continue to profit.