The economic impacts of the COVID-19 pandemic extend to all sectors of the economy. For ag and food trade, the long-term effects could be important as the COVID-19 pandemic has exemplified the fragility of food supplies that depend on imports. In response, several countries are developing their ag and food sectors to become more self-reliant.
Recent data from Statistics Canada gives us a glimpse into the impacts of COVID-19, which could hint toward permanent changes in trade patterns. We examined recent events and trends for selected ag and food products and discuss COVID-19 impacts for April 2020.
Canada became a net food exporter in 2019
The COVID-19 pandemic also raised issues about food self-reliance in Canada. Interestingly, Canada now has a trade surplus dollar-wise for food products. But this does not mean that Canada is self-reliant, because the baskets of goods produced and consumed are different, and Canada relies on imports for several food products.
In 2016, Canada had an annual trade deficit for food of more than $2.8 billion. That deficit was reduced in 2017 and 2018 and turned into a $100 million surplus in 2019. In Q1 of 2020, Canada had a trade surplus for food of $578 million. This is partly due to seasonality as the trade balance for food tends to be more positive in the winter. From March to April, exports of food dropped by $550 million while imports decreased by $184 million, causing the trade balance to become negative. The COVID-19 pandemic may erase our net food exporter position in 2020 if the April trend continues.
Click here to see more...