FCC Ag Economics: A 2015 Look at Global Trade is available today with a new analysis of the impact of exchange rates on Canadian export values of crops, livestock and manufactured food products.
A lower loonie will help grow Canadian export values – sometimes. And in some of Canada’s top markets. But exchange rates are only one of several factors that impact exports, and often, they have less impact than others.
In fact, GDP growth in Canada’s top five markets is more important to the growth of Canadian exports. Of Canada’s top export markets, China – Canada’s second largest ag-related market – will boast the greatest GDP growth in 2016, potentially spurring an additional $343 million worth of crop exports in 2016.
While it’s important to keep an eye on currency fluctuations, most of your energy should focus on building a competitive position around the more long-term success factors of innovation and productivity. Developing relationships with local suppliers in export markets and diversifying markets goes a long way to enhance competitiveness. In turn, this mitigates the risk of exchange rate fluctuations.
Martha Roberts, Economic Research Specialist
For more on global trade from FCC Ag Economics, check out these videos, featuring JP Gervais, FCC’s Chief Agriculture Economist:
- Emerging Markets and their Effect on Canadian Exports
- Exchange Rates and their Effect on Canadian Exports