Tariff reductions hold possibility of new dry bean markets

Wednesday, January 28, 2009

© Copyright AgMedia Inc

by GEOFF DALE

A significant reduction in tariffs under the North American Free Trade Agreement could result in greater access to the huge Mexican marketplace for Canadian producers, say industry insiders.

“Here is a customer (Mexico) that consumes 120,000 tonnes of dry beans yearly,” says Sean MacKenzie, president of Fieldcrest Commodities. “So this tariff change will mean a much bigger market for us in the future.”

Derwyn Hodgins, field marketing manger of Hensall District Co-op says United States black bean producers have enjoyed a distinct advantage over their Canadian counterparts for more than 10 years – shipping about 60,000 metric tonnes tariff free to Mexico yearly, compared to only 1,800-2,000 from this country.

“As of January 2008 it’s been basically tariff free so the U.S. no longer has a competitive advantage over Canada,” he says.

With the potential opening up of such a large market, Hodgins says Canadian producers can now look for new opportunities in Mexico – including the export of pintos – while maintaining their successful business selling navy beans to the United Kingdom, their major focus over the past decade.

While the outlook for Canadian producers looks bright, MacKenzie says much depends on the size of Mexico’s domestic crop.

“If they have a big crop, then they will have non-tariff barriers that will protect their crop,” he says. “If it’s a small crop, they will need to import, so that will allow us to access significantly more tonnage than in the past.”

He says it comes down to availability, supply and demand. BF