The Canadian Wheat Board has the inside track on the lucrative Japanese market for Canadian milling wheat.
White told a meeting in Somerset, Man. last month that he had just returned from Japan and is encouraged about prospects in that premium market.
“I think they (Japan) want the CWB to be their main supplier and we hope to be able to do that.”
CWB wheat exports to Japan have averaged 1.2 million tonnes annually over the last 10 years, but one farmer questioned whether the CWB can maintain that volume given that others can now compete for the sales.
“The Japanese value long-term relationships,” White said. “We know it’s a competitive world and we are going to have to compete in that world, but they are saying to us that they will give us the first look at the business, particularly if we can deliver them the quality and the continuity that they are used to.”
White said the CWB might not be able to compete in commodity markets where buyers focus on getting the lowest price.
“We understand that and we will be competing in there where we need to, but we will also try to keep away from those markets where we can,” White said.
Glencore is a commodity trader, he said. The company that wants to buy Viterra usually sells on a multiple-origin basis, allowing it to source wheat where it’s the cheapest.
“We’ll be selling the grain that we take from Canada and selling to customers who value quality,” White said. “So we see our place very much more down the end of the market… dealing with customers who value that and who will deal with a company like the CWB and generally pay a bit more because we have a relationship with them, we know them and we can satisfy their needs.”
The CWB has the authority to buy and sell wheat produced outside of Canada, but doesn’t expect to do so often, White said. Sometimes customers want lower-quality wheat to blend with Canadian wheat and now the CWB can provide both.