New trade statistics from Vancouver’s busy Pacific port show the continued resilience and diversity of Canada’s economy, despite stagnant global growth and a collapse in commodity prices that has hit some of the country’s biggest firms, the port’s chief executive officer says.
Port Metro Vancouver released year-end trade numbers for 2015 late last week. And although the results are slightly mixed, port CEO Robin Silvester said that as some sectors have sagged because of global factors, others have risen in their place.
“It’s quite a pleasing year when you look at the softening of the global economy,” Mr. Silvester said.
Overall trade volume was still relatively flat, at 138 million tonnes of cargo, and that is something Mr. Silvester said he expects to continue into the future, with the next few years seeing something of a “holding pattern” in trade volumes, rather than strong growth – which might only come between three to five years out, he added. “If we project forward, what we’re expecting this year is more of the same,” he said.
There were some rather obvious indications of decline across Canada’s energy sector, which has suffered through a disastrous collapse in the price of oil, and across B.C.’s traditional natural resource exporters. Break bulk foreign metal imports dropped steeply by 25 per cent as Alberta’s energy sector stopped investing and expanding, while break bulk forest product exports from B.C. fell 5 per cent from the previous year. Metallurgical, or steel-making, coal shipments dropped 21 per cent – with shipments to China alone falling a staggering 29 per cent, as the world’s second-largest economy continued to slow down.
But the bright spots were clearly a strong continuation of container volume growth and a big jump in the specialty crops, such as lentils and pulses. Over the course of last year, total container volumes climbed 4.9 per cent, showing continued gains in trade with Asia’s major economies: China, Japan and South Korea. But bulk specialty crops surged even more, increasing 20 per cent to 3.5 million tonnes as a growing middle class in India demands a steady supply of higher-quality pulses and lentils, and many in China eat more meat – and consequently need more animal feed to rear livestock. That demand is also leading to higher prices for producers on the Prairies. Wheat exports reached a record last year, up 20 per cent to 10.7 million tonnes.
“We continue to see growing middle-class incomes [in China and India] boosting protein and high-quality Canadian agricultural products demand,” said Murad Al-Katib, the CEO of AGT Food and Ingredients Inc., a global exporter based in Regina with about 30 facilities around the world. “With these positive demand fundamentals, Canadian lentil and pulse prices have been historically high. Canadian farmers will react with what I project to be a historical record for these crops potentially reaching nearly 10 million acres of production.”
Mr. Al-Katib said weak monsoon rains in India that have led to drought on the subcontinent’s fertile plains are likely to persist throughout 2016 and 2017, continuing to boost demand in India for Canadian products. At the same time, Mr. Al-Katib said China is seeing two types of consumption growth in grains: feed grains for animal feed and higher-quality ones for human consumption. He noted that China is now Canada’s biggest yellow pea market, overtaking India for the first time, by purchasing more than one million tonnes as Chinese importers extract the starch for vermicelli noodle production.
Some of the bright spots for producers on the Prairies were surprising. Shipments of wheat to Indonesia surged 125 per cent from 2015. The numbers also showed that the Pacific Rim includes far more than just Asia: Shipments of potash and potassium-based fertilizers to Brazil jumped 34 per cent, while Chile received a big increase in shipments of thermal coal – a 43-per-cent surge year over year, even as volumes dropped on coal shipments to China and South Korea.Report Typo/Error