Value-added could be a means to diversifying trade with China

China has a large agricultural base, but despite this, their self-sufficiency is hindered by rapid urbanization and the sheer volume of people to feed. Even though it relies on other countries for commodities, China is a challenging country to do trade with.

Canada’s not the only country that has had problematic negotiations with China — Australia has had their fair share of sanctions on beef, barley, and even wine. This begs the question: should Canadian agriculture further diversify its trading partners?

Al Mussell, research lead and founder of Agri-Food Economic Systems, recently joined Shaun Haney to discuss trade with China, how other countries could be better trading partners, and how Canada could diversify.

Part of a trade diversification strategy could be domestic food and ingredients processing, and the recent focus on canola crush capacity and Protein Industries Canada’s projects has really exemplified this strategy, he says.

“When you can be in both the farm product, an intermediate version of the product, or even a consumer-ready part of the product, that’s part of a trade strategy,” says Mussell. The highest rate of growth is in end-consumer products, when looking at the breakdown of Chinese commodities.

Focusing on the consumer product, instead of the raw product, is risky but there are some benefits says Mussell. “The more that you’ve got a product that identifies Canada or identifies a specific brand that is a touch point with consumers, practically speaking it’s a little bit more difficult for governments to mess with putting trade barriers on or otherwise interrupting consumer access to those products,” Mussell says.

Listen in to the full conversation for more on the relationship between the U.S., China, and Canada, and the potential impact of the Biden administration on Canadian agricultural trade:

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