August 10, 2018 6:18 am

Saskatchewan producers hit by Saudi Arabia barley boycott

Mounting issues between Saudi Arabia and Canada have resulted in a number of retaliatory actions from the Middle Eastern country, including an end to Canadian grain purchases. But what does this mean for the province's exports?

A A

Mounting tensions between Saudi Arabia and Canada have resulted in a number of retaliatory actions from the Middle Eastern country, including an end to Canadian grain purchases.

Earlier this week, the Saudi Grains Organization announced it’s halting purchases of wheat and feed barley from Canada.

Story continues below

“Ultimately, that’s not a positive thing. We’re looking to expand our access to markets around the world — that’s how we maximize the value of our products. At this point, it’s hard to quantify precisely what sort of impact it’s going to have, as far as a dollar figure, but it’s going to be an impact,” Trade and Export Development Minister Jeremy Harrison said.

According to Harrison, the province raked in $21 million from agricultural exports in 2017, including nearly 100,000 tonnes of barley to Saudi Arabia.

READ MORE: Canadian Wheat Board to be sold to Saudi-owned Global Grain Group

“We have historically had significant exports of wheat [to Saudi Arabia]. Peas and lentils are an area where we have had increasing amounts of exports of the years and Saudi Arabia could’ve been a market where we could have seen expansion of that trade as well, so we’re obviously very concerned about the announcement.

The Saudi market accounts for seven per cent of the nation’s barley exports, but it hasn’t always been consistent in Saskatchewan. In 2015, the country did not import any of the province’s barley.

“They are not a consistent buyer,” explained Brent Johnson, vice-chair at the Saskatchewan Barley Development Commission.

“They usually come in when our prices are depressed and last year at the early part of the year, they were depressed and they bought then. You never want to lose a market, but they aren’t the main buyer of our barley,” Johnson countered.

Others argue the loss of a potential market — no matter the size — is another blow to an industry that is facing mounting pressure to find buyers.

READ MORE: Alberta Wheat and Barley Commissions concerned about national investment decision

“If this was just one country where we were having market access concerns, and concerns about growing protectionism, it would be a speed bump along the road; but it’s not. That’s costly for farmers, and it’s very worrisome for an industry that depends on trade,” Cereals Canada president Cam Dahl said.

“We’ve always encouraged the opportunity to expand into new markets … because what it means for Saskatchewan producers is more opportunities to sell the best agricultural products in the world, but losing any market is a negative thing,” Harrison added.

Last year, Canada exported 66,000 tonnes of wheat and 132,000 tonnes of barley to Saudi Arabia.

© 2018 Global News, a division of Corus Entertainment Inc.

Report an error

Comments

Want to discuss? Please read our Commenting Policy first.

Global News