![#](https://e-malt.com/Images/left_top_corner16x200.gif) | E-Malt.com News article: Canada: The appreciation of the Canadian dollar has significantly reduced domestic and export barley prices and returns![Barley news](https://e-malt.com/Images/Ear2a.gif)
Canada is the fourth largest exporter in the world grains and oilseeds (G&O) market. With a relatively small domestic market for its products, the Canadian G&O industry depends heavily on the international market, Agriculture and Agri-Food Canada (AAFC) released in its Be-Weekly Bulletin of August 11 on the impact of the appreciation of the Canadian dollar on Canada’s Grain and oilseeds prices and trade.
The appreciation of the Canadian dollar, against the United States (US) dollar, since 2002-2003 has significantly reduced domestic and export G&O prices and returns to Canadian producers, in terms of Canadian dollars. For 2006-2007, the Canadian dollar is projected by the major Canadian banks to be slightly stronger than 2005-2006, which will continue to depress Canadian G&O prices.
G&O prices in Canada generally follow international prices very closely. In addition to the heavy dependence on exports of the Canadian G&O industry, the Canadian domestic market is highly integrated with the world market through the US market where US prices serve as the basis for the rest of the world.
Feed barley prices are determined at the Winnipeg Commodity Exchange. Feed barley prices at Lethbridge elevator are highly correlated with Chicago Board of Trade (CBoT) corn prices. The appreciation of the Canadian dollar has substantially lowered the landed price of US corn, in both eastern and western Canada. This has contributed to increased corn imports from the US, and lower Canadian domestic prices for corn and feed barley.
For 2006-2007, Canadian G&O prices are forecast at CA$130/t for No. 1 Feed Barley (I/S Lethbridge). If the US/Canada currency exchange rate had stayed at the 2001-2002 level of CAN$1.57/US$, the price for 2006-2007 would have been CA$50/t higher for barley.
18 August, 2006
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