Peru: Prospects for malting barley sales have exploded thanks to double-digit increases in beer consumption

Senior CWB officials met today with Peru’s ambassador to Canada to discuss enhanced trade opportunities for western Canadian wheat and barley, CWB announced in its press release, May 14. Peru and its neighbour Colombia are two of the fastest-growing Latin America markets for Prairie grain.

“There are tremendous opportunities opening up for Prairie grain in Peru and the other Andean nations -- and that’s what we focused on today,” CWB president and CEO Greg Arason said of the meeting with His Excellency Guillermo Jose Miguel Russo-Checa.

Prospects for malting barley sales have exploded as rebounding economies in this region create double-digit increases in beer consumption. The CWB also made record wheat sales to Peru in 2006. However, Arason said this growing trade relationship is now threatened by a bilateral free-trade agreement between the United States and Peru that could put western Canadian farmers at a serious competitive disadvantage.

“Our grain customers in Peru have forged an excellent relationship with the CWB and would love to see it expand,” Arason said. “However, if we are faced with a 17-per-cent tariff disadvantage to the Americans, they have told us that it will be impossible to ignore a cost difference of roughly $45 per tonne of grain.”

Since 2003, the CWB and other agricultural exporters have joined forces to urge Ottawa to forge bilateral trade agreements to ensure Canadian exports do not lose ground to international competitors. International Trade Minister David Emerson recently indicated that negotiations with key Latin American countries will soon begin.

“The CWB has been working hard to develop customer relationships that have positioned us well,” Arason said. “We urge the federal government to forge ahead with its plans to pursue the same trade access for Canada that the United States will soon enjoy.”

For example, the CWB has worked to make Western Canada a major supplier of malting barley to brewers SAB Miller in the Andean nations of Peru, Colombia, Ecuador and Chile. Malting barley sales to Peru, worth about $2.7 million in 2006, are expected to increase by more than $2 million over the next year. Prairie malting barley sales to Colombia, last year at roughly $12.5 million, are also expected to grow significantly.

The value of CWB wheat, durum and barley exports to Peru and Colombia in 2006 totalled almost a quarter billion dollars. Wheat sales to Peru alone in 2006 were a record 575 000 tonnes, a 33-per-cent increase over 2005.

Controlled by western Canadian farmers, the CWB is the largest wheat and barley marketer in the world. One of Canada’s biggest exporters, the Winnipeg-based organization sells grain to over 70 countries and returns all sales revenue, less marketing costs, to farmers.

16 May, 2007