Canadian farmers hungry to enter China oat market

Prairie growers hope to benefit from China’s projected voracious demand for oats.

“Chinese demand will probably double every five years and rival the United States within 15 years if the trends remain in place,” says Randy Strychar, president of Ag Commodity Research.

The U.S. is the world's largest importer of oats, estimated by U.S. Department of Agriculture to take about 1.7 million tonnes in 2017-2018.

The USDA predicts China’s oat imports to reach 300,000 tonnes in 2017-2018, a huge increase from 87,000 tonnes in 2012-13.

Middle class

“The new Chinese middle class is looking for healthier food and more nutritious products to complement staple traditional foods, such as rice and wheat noodles,” explains Prairie Oat Growers Association’s executive director Shawna Mathieson. “Oats fit well into that diet.”

Snack bars and breakfast cereals, in particular, are fuelling China’s growing oats appetite, adds Strychar.

“We can see breakfast cereal and snack bar trends out to 2022, and the largest growth globally is in the Asia-Pacific market, and that’s China,” he says.

Canada locked out

But it’s Australia that’s benefitting as it comprises about 97 per cent of China’s oat imports.

“Right now, [raw] oats for food and feed consumption are simply not allowed into China from Canada,” Mathieson points out.

The Prairie Oat Growers Association submitted a request through the federal Market Access Secretariat in 2015 to get restrictions lifted.

The Canadian Food Inspection Agency and its Chinese counterpart AQSIQ signed a 2018 work plan in which oats are included, which POGA calls the first milestone toward a phytosanitary agreement and market access.

“The fact that the protocol is taking so long to put in place, it doesn’t seem like the Chinese are in a hurry to look for alternative sources or for any increased competition,” Strychar notes.

Access equals more acres

“If Canadian oats are allowed into China, it will increase demand and therefore increase seeded acres of oats in Canada,” Mathieson says. “In addition it will provide another significant market for oats, as right now nearly 90 per cent of Canadian oat exports go to the USA.”

Strychar cautions Australia could remain China’s dominant supplier.“Australia’s got a very flexible market... Pay them to grow the oats, they can grow all the Chinese would need.”

Bottom line

Chinese oats demand could rival that of the U.S. and present a huge boon to Prairie growers if trade access is granted.

Article by: Richard Kamchen