Minister of International Trade Maninder Sidhu concluded his trip to Singapore and Vietnam, the federal government said Wednesday.

WHY IT MATTERS: The Indo-Pacific region is seen as a growth market for Canadian agri-food trade. Canada’s Indo-Pacific strategy is also touted by the government as a key part of the country’s economic future.

Sidhu met with industry leaders in Vietnam to discuss strengthening supply chains and attended an agri-food showcase hosted by supermarket chain BRG Mart, which carries Canadian products like apples, oatmeal and frozen beef.

With an eight per cent growth trajectory, “Vietnam will require enhanced food security through Canadian agri-food expertise,” Sidhu said in a Feb. 18 news release.

He also spoke about the work by the Canadian and Vietnamese ministries of agriculture to resolve access issues, reopen markets to Canadian salmon and safeguard market access for Canadian pork in case of an outbreak of African Swine Fever (ASF) in Canada.

In both countries, Sidhu met with government officials to strengthen bilateral trade ties and emphasize the importance of a free trade agreement between Canada and the Association of Southeast Asian Nations (ASEAN).

Sidhu announced $7.3 million in funding for the Vietnam Initiative for Strengthening Trade as part of Canada’s commitment to support that country’s economic and trade-related legal reform.

He also announced US$20 million (C$27.4 million) in funding to support Vietnamese farmers and agribusiness to adopt more sustainable practices.

The Indo-Pacific is Canada’s second-largest regional merchandise export market after the U.S. Vietnam is Canada’s largest merchandise trading partner among ASEAN countries.

Sidhu has previously sought out trade deals in Indonesia and the Philippines as well.

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Vietnamese millers have been importing around 30,000 metric tons a month of Canadian canola meal, used mainly in animal feed, for the past few months, two Singapore-based traders and one Ho Chi Minh-based trader told Reuters on the sidelines of an international industry conference in Jakarta.

The purchases show how trade frictions are disrupting global flows of goods. Vietnam typically imports soymeal, not canola meal, for animal feed, but the drop in price since China imposed duties on Canadian shipments has made canola meal far more attractive.

More deals expected

Vietnamese feed makers were paying $220 per metric ton (C$302.30), including cost and freight, for Canadian canola, compared to around $300-$310 per ton paid by Chinese buyers before the duties were imposed in March, according to traders.

“The volumes are not huge as compared with what China was buying, but shipments are heading to Vietnam,” said one of the Singapore traders. “We expect more deals in the coming months.”

The traders declined to be named as they were not authorized to speak to the media.

Canadian officials had constructive talks with their Chinese counterparts about Beijing’s duties during a recent visit, Prime Minister Mark Carney’s office said in a statement on Friday.

Canadian canola meal stuck in China

China, the world’s largest importer of canola, imposed preliminary duties of 75.8 per cent on Canadian canola seed imports in August.

Earlier, Beijing had imposed a 100 per cent retaliatory tariff on imports of canola meal and oil from Canada, effective March 20.

Some Canadian canola meal cargoes, which arrived in China after the 100 per cent duty took effect and are now stuck in bonded warehouses, could be redirected to Vietnam, traders said.

Up to 400,000 metric tons of canola meal are sitting in secure warehouses near Chinese ports, with importers facing a 100 per cent duty if they release the cargoes for sale in the domestic market.

“Trading companies which have Canadian canola lying in China are trying to sell to feed companies in Vietnam,” said the second Singapore trader. “But the demand is not very big.”

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The visit by Xi, which had been planned for months, came as Beijing faces 145 per cent U.S. tariffs, while Vietnam is negotiating a reduction of threatened U.S. tariffs of 46 per cent that would otherwise apply in July after a global moratorium expires.

Why it matters: China and Vietnam are both important importers of Canadian agricultural goods

The two nations also jointly opposed hegemony, power politics, and unilateralism, according to the joint statement.

“Faced with the uncertainty, instability and unpredictability of the international situation, the two sides will firmly uphold multilateralism,” the joint statement said.

U.S. President Donald Trump said on Monday that the two countries’ discussions were focused on how to harm the United States, but that he did not blame them for holding such talks.

In the joint statement, Vietnam also said it was ready to discuss a partnership with the BRICS grouping of countries.

Vietnam’s Prime Minister Pham Minh Chinh attended a BRICS summit as an observer for the first time last year, but Hanoi has so far not accepted an invitation to become a formal partner of the club led by Brazil, Russia, India, China and South Africa.

Last month, during his visit to Vietnam, Brazil’s President Luiz Inacio Lula da Silva invited Vietnam to the BRICS summit that Brazil will host in July.

In Tuesday’s statement, the two countries also eyed research and cooperation in the key mineral sector, in accordance with the laws and industrial policies of each country.

During Xi’s visit, China and Vietnam have signed 45 agreements, including deals on enhancing supply chains and on cooperation over railways, state media of both countries reported.

— Reporting by Phuong Nguyen and Francesco Guarascio

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Cereals Canada, a national cereals industry group, on Friday reported that Vietnam’s agriculture ministry has released a revised quarantine pest list due to take effect Sept. 29.

The new list, Cereals Canada said, will no longer include Canada thistle — otherwise known as creeping thistle or field thistle — which has been the subject of more-restrictive measures in bulk grain exports to Vietnam for over four years.

Vietnam in 2018 proposed new measures to block grain shipments that arrived with Canada thistle seed, to take effect as of Jan. 1, 2019.

Vietnamese officials warned at the time of “incalculable consequences” if thistle — already an established weed in Canada, the U.S. and Europe — were to get established in that country.

According to the Canadian Special Crops Association, officials in Canada were notified in March 2019 that some wheat and soybean shipments were found to be non-compliant with the new rule.

The result, Cereals Canada said Friday, was that in 2021 alone, Canada’s wheat exports to Vietnam came in at just over 20,000 tonnes, compared to more than 200,000 tonnes per year before the thistle seed restriction was tightened.

“With creeping thistle on the quarantine pest list, Canadian grain cargoes faced the risk of commercial penalty,” Cereals Canada CEO Dean Dias said in the organization’s release Friday.

“This change means that exports of Canadian cereals to Vietnam will be able to resume in bulk shipment for the first time since 2018.”

Dias said Cereals Canada had worked closely with the Canadian Food Inspection Agency, the federal Trade Commissioner Service and the federal ag department to help remove what he described as a “non-tariff trade barrier.”

Once the revised list is in place, however, “we look forward to the resumption of regular cereals trade between Canada and Vietnam.”

Vietnam, which along with Canada is a member of the Trans-Pacific Partnership (CPTPP) free trade bloc, is also billed as Canada’s largest trading partner in the Association of Southeast Asian Nations (ASEAN).

According to federal trade officials, agriculture and agri-food are considered a “priority sector” in Vietnam for Canadian business. In 2020, Vietnam’s total agri-food imports totalled US$20.9 billion, of which US$302 million came from Canada. Vietnam’s total imports of cereal grains from Canada that year were valued at US$74 million. –– Glacier FarmMedia Network

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The vaccines include NAVET-ASFVAC, co-developed by Navetco Central Veterinary Medicine and scientists from the United States, and AVAC ASF LIVE developed by AVAC Vietnam JSC, the government said in a statement.

The approval of the vaccines could pave the way for possible sales abroad, a major breakthrough to tackle the deadly animal disease that regularly ravages pig farms worldwide.

African swine fever has for years disrupted the $250 billion global pork market. In the worst outbreak in 2018-19, about half the domestic pig population died in China, the world’s biggest producer, causing losses estimated at over $100 billion.

The ministry of agriculture has told the companies to work out production plans for domestic sales and for exports, the government statement said.

More than 650,000 doses of the vaccines had recently been tested on hog herds in 40 provinces, with an efficacy rate of 95%, according to the government.

“The vaccines are eligible for circulation and use nationwide,” the ministry said in the statement.

U.S. Agriculture Secretary Thomas Vilsack said last month there was likely to be interest in precautionary purchases in the United States, despite the country having so far been spared from the virus.

–Reporting for Reuters by Khanh Vu.

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Some 26 representatives of Canada’s soybean industry made the trip last month, along with individuals from Agriculture and Agri-Food Canada, Transport Canada, the Canadian Grain Commission and Soy Canada.

According to a Feb. 23 press release, customers heard about Canadian growers’ production sustainability, projections for the 2023 growing season, the global soybean market, Canada’s traceability program, research initiatives and other topics.

Why it matters: International shipping, domestic logistical issues and other factors have affected Canada’s ability to supply soybeans to large and growing foreign markets.

As detailed by Soy Canada delegates, the Indo-Pacific visit was intended to support stable access to food and feed soybean markets, as well as endorse free trade of the commodity. The first in-person meeting between visiting Canadians and buyers in the three Asian countries since 2019, it was also an opportunity to discuss wider trade challenges and constraints.

“Asian markets are very much about relationship building and having direct connection points,” says Nicole Mackellar, market development manager for Soy Canada.

Buyers reiterated their need for consistency in the supply chain, while the delegation communicated how the industry is trying to resolve lingering supply issues such as shipping container shortfalls and logistical challenges.

Mackellar says transportation improvements include more container availability and faster transit times. Things are still far from pre-pandemic levels, however.

Brian Innes, executive director of Soy Canada, also says congestion is easing, but the concentration of global shipping into just three trade alliances continues to frustrate those who sell Canadian commodities.

“Shipping is getting more normal in price and more predictable than it has been. As Canadians, though, we continue to see real challenges with the level of service offered by a very concentrated international shipping community,” says Innes, adding the United States government has been particularly effective at holding shippers accountable for better service.

“In Canada we have not had that same pressure, and we’re also a smaller market for both imports and exports. There’s been virtually no action by the Canadian government…

“What I heard from customers was the emphasis on the importance of predictability. Predictability of systems within Canada, that’s our railway and ports, and on the shipping side. But at no time did I understand from them that it was a particular concern for Canadian exports.”

As shipping issues evolve, Mackellar says the sector has placed more emphasis on forward contracting in an effort to communicate expected export volumes.

Market constraints

Each country highlighted different buyer needs and market trends. In Japan, high quality and protein in Identity Preserved (IP) soybeans were noted as particularly important for food products.

In Malaysia, participants heard about the country’s rising middle class and its demand for soy food products.

In Vietnam, soybean crushing capacity is set to double in the next two years to meet growing demand for food and feed. However, Canadian soybean exports have faced significant market access challenges in Vietnam over the past five years.

Vietnam is a particularly “price sensitive” country, says Mackellar, and often opts for unclean shipments because they are cheaper. But Canada does not send unclean grain shipments due to the potential presence of creeping thistle, so the price of Canadian soybeans is higher. Consequently, Vietnamese buyers look to other sellers.

“The program provided an opportunity to talk with customers about how we can improve trade between our two countries. There’s a lot of interest in Vietnam,” Mackellar says.

Regardless of challenges discussed, Mackellar and Innes say the trip provided many reasons for optimism. Current market opportunities already outstrip what Canadian growers can supply, and with other countries’ growth in wealth, changes in eating habits, and other socio-economic factors forthcoming, greater opportunity is anticipated.

For Scott Persall, a Norfolk County farmer and one of the grower delegates, repeated emphasis on the quality of Canadian soybeans was both stark and heartening.

“I was really impressed all three countries talked about the high quality of soybeans for Canada,” says Persall.

“One of the challenges we heard from seemingly all countries was IP soybean price increase. At their end, they were concerned about high energy, labour, and raw materials. Those are the challenges here … in Canada as well.”

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Since the disease was first detected in February, it has spread to all 63 provinces in Vietnam, forcing the culling of some six million pigs, or 20 per cent of the total hog herd, and nearly tripling prices.

The increase in pork price is putting upward pressure on inflation, especially in the first quarter of 2020, due to higher consumption during the Lunar New Year holiday in late January, the ministry said in a statement on its website.

Vietnam will continue to import pork while restoring pig production as the outbreak has shown signs of slowing down, the ministry said.

“We can’t let a pork shortage happen,” Deputy Prime Minister Vuong Dinh Hue said in the statement. “We have to import to compensate for the deficit.”

While not harmful to humans, African swine fever is deadly to pigs, with no available vaccine.

The outbreak has driven up prices for live pigs in Vietnam to over 100,000 dong (C$5.67) per kilogram from around 35,000 dong early this year, traders say.

— Reporting for Reuters by Khanh Vu.

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China has been struggling to control the epidemic, which some analysts predict could see up to 200 million pigs die or be culled this year, causing a huge shortage of pork locally and have economic impact on the meat and feed industry globally.

Outbreaks of the disease, which is not harmful to humans, has already been reported in almost every region of mainland China.

“China is going to deal with this African swine fever for many years to come,” OIE deputy director general Matthew Stone told Reuters in an interview on the sidelines of the 87th general assembly of the Paris-based organization.

Beijing has said its breeding herd is 22 per cent smaller than this time last year, but many in the industry say the impact of the disease could be much greater.

African swine fever has spread to Vietnam, Cambodia and Mongolia and Stone said there was a significant danger that the virus could reach other Asian countries in the coming months.

“The situation is going to continue to evolve in Asia because we know there is significant contamination of the meat and meat products supply chain and practices such as garbage feeding that may not be appropriately regulated,” Stone said.

Vietnam already culled 1.7 million pigs to tackle an outbreak of the disease, or five per cent of the country’s herd.

“It is an enormous challenge for some of these countries in Asia to transform their farming systems into higher biosecurity systems but that’s the imperative,” he said.

The spread of African swine fever has not only damaged the Asian pig population and the pigmeat market in China, but also hit the international pork market and animal feed markets like soybean.

“So all of those impacts are going to continue to provide a great deal of market uncertainty which has radiating effects broader than just the pig industry sector,” Stone said.

African swine fever kills almost all pigs infected and the virus can last for weeks in contaminated materials, allowing it to travel over long distances.

“We are going to live with African swine fever for many years,” Stone said. “This is why the long-term focus on research and development and the short- and mid-term focus on improved biosecurity and veterinary services’ capacity to respond is absolutely imperative.”

On Tuesday, the OIE launched a global initiative, to be co-ordinated with the United Nations’ Food and Agriculture Organization, to try to keep the disease in check.

“The objective is to control the disease, strengthen countries’ prevention and preparation efforts, and minimize the adverse effects on animal health, animal welfare and international trade,” the OIE said in a statement.

The disease currently has no cure but Chinese state media said on Friday that China would start working on clinical trials of a vaccine.

Scientific publications suggest breakthroughs on vaccines are close but it could take a long time to take a vaccine from a laboratory into the field due to regulatory authorization processes, Stone said.

— Reporting for Reuters by Sybille de La Hamaide in Paris.

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Increased testing aims to help U.S. officials detect cases of African swine fever quickly so they can contain the disease.

African swine fever kills almost all pigs infected, though it is not harmful to people. There is no vaccine or cure.

The disease has spread rapidly across China, the world’s top pork producer, and in neighbouring Vietnam the government said it will mobilize its military and police forces to combat an outbreak.

Cases in the United States would halt shipments in the US$6.5 billion export market for U.S. pork at a time when the industry is already facing retaliatory tariffs imposed by China and Mexico.

“An enhanced surveillance program will serve as an early warning system, helping us find any potential disease much more quickly,” said Greg Ibach, USDA’s undersecretary for marketing and regulatory programs.

USDA will start testing pigs for African swine fever when it conducts routine tests for another hog disease, classical swine fever. Sick or dead pigs at slaughterhouses and those that are sent to veterinary diagnostic labs will included in the expanded testing, according to the agency.

Testing for African swine fever is important because its symptoms can resemble those for diseases already in the United States, such as porcine reproductive and respiratory syndrome, said Tom Burkgren, executive director for the American Association of Swine Veterinarians.

“That’s a significant step for them to take that will certainly help discover that first case of ASF, if it happens, early on,” Burkgren said.

USDA said it also will work with state and federal officials to identify incidents involving sick or dead feral swine to determine if they should be tested for African swine fever.

The U.S. government previously increased screenings for illegal pork products at airports and cracked down on smuggling in an effort to keep out African swine fever.

Last week, Tyson Foods’ CEO said it was “very plausible” the disease could enter the United States because of its rapid spread across Asia.

— Tom Polansek reports on agriculture and ag commodities for Reuters from Chicago.

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Vietnam’s government said in a statement that the toxic level of herbicides containing glyphosate had long been of concern, in the latest display of global worries over the product’s impact on human health. State media reports said the ban would take effect in June.

Glyphosate, the chemical contained in Bayer’s best-selling weed killer Roundup, is the target of thousands of lawsuits in the United States alleging exposure to it causes cancer.

Roundup, which Bayer acquired with its US$63 billion purchase of Monsanto last year, was the first to contain glyphosate, the world’s most widely used weed killer. But it is no longer patent-protected and many other versions are available.

Bayer said Vietnam’s ban will not improve food security or safety in the country and that the company was not aware of any new scientific assessment undertaken by Vietnam’s government on which the decision is based.

“The overwhelming weight of over four decades of extensive science and the conclusions of regulators worldwide… support the safety of glyphosate-based herbicide products,” Bayer said in a statement.

Perdue said the U.S. government had shared scientific studies with Vietnam concluding that glyphosate is unlikely to pose a carcinogenic hazard to humans.

“As I’ve often said, if we’re going to feed 10 billion people by 2050, farmers worldwide need all the tools and technologies at our disposal,” Perdue said.

“In addition to the immediate effect of slowing the development of Vietnamese agricultural production, there’s the very real risk that Vietnam’s farmers will turn to unregulated, illegal chemical products in place of glyphosate,” Perdue said.

While regulators in Europe and elsewhere agree with the U.S. assessment, the World Health Organization’s cancer arm in 2015 classified glyphosate as “probably carcinogenic to humans.”

Hoang Trung, head of the plant protection department under Vietnam’s ministry of agriculture and rural development, said in a statement posted on the department’s website that long-term exposure to herbicides and pesticides affects the environment and is severely unhealthy for those exposed.

“The decision to remove herbicides containing glyphosate from the list of plant protection chemicals permitted for use in Vietnam is in accordance with the current law, international regulations and in line with Vietnam’s socio-economic conditions,” Trung said in the statement.

Sri Lanka prohibited glyphosate use in 2015 but reversed its decision for tea and rubber last year after farmers said the ban hurt businesses, according to Bayer.

— Reporting for Reuters by Tom Polansek in Chicago and Khanh Vu in Hanoi; writing by Caroline Stauffer.

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