(OTTAWA) – November 12, 2009 – Saskatchewan's international exports are forecast to increase by 1 per cent in 2010 after dropping by 29 per cent in 2009, according to a provincial export outlook by Export Development Canada (EDC).
“The boom-bust cycle intermittently swings Saskatchewan's export pendulum from one extreme to the other, and the current downturn is no exception, with the energy and fertilizer sectors leading the way,” said Peter Hall, Chief Economist, EDC. “Lower meat and livestock production, combined with a weaker crop expected this fall, will constrain total export growth to only 1 per cent next year, despite higher energy prices.”
“Fertilizer exports will have halved on an annual basis this year” Mr. Hall added. “A buyer's market will prevail through the fall planting season, and shipments should rise in 2010 as buying activity gradually returns, but a significant rebound in export receipts isn't in the cards.”
The largest export sector in the province is energy, which accounts for 38 per cent of Saskatchewan's total. Exports of crude and petroleum products for this year and next will be depressed, with reduced output of heavy oil offsetting higher production of light crude, particularly out of the Bakken oilfield.
“The forecast growth in export values of 4 per cent in 2010 will be led by a modest increase in the price of oil. With drilling activity in the province estimated to be down by as much as 45 per cent in 2009, as per PSAC's latest estimates, the outlook for shipments beyond 2010 appears increasingly muted,” Mr. Hall said.
The province's second largest export sector is agrifood, accounting for 32 per cent of Saskatchewan's total. The province's agrifood exports are expected to decline by 3 per cent in 2010.
“Saskatchewan's flagship grain and oilseed exports are set to reverse course by year-end as last season's bin buster cedes to a smaller 2009-2010 harvest and prices remain depressed,” Mr. Hall said.
In examining crop prices, Mr. Hall said that “Generous carry-in stocks will offset only part of the decline in production, and with the domestic crush industry absorbing a greater share of the canola harvest, exportable supplies are set to contract. In light of this season's near-record global grain and oilseed crops, coupled with poor feedgrain demand, prices face little upside until late 2010.”
Canadian exports are forecast to contract 23 per cent in 2009 before rebounding 6 per cent in 2010. Nationally, economic growth is expected to fall by 2.3 per cent in 2009 with an upturn to 1.9 per cent in 2010. Internationally, EDC is forecasting a decline of 1.3 per cent in 2009 and 2.9 per cent growth in 2010. EDC's Global Export Forecast is available at http://www.edc.ca/gef .
EDC is Canada's export credit agency, offering innovative commercial solutions to help Canadian exporters and investors expand their international business. EDC's knowledge and partnerships are used by more than 8,300 Canadian companies and their global customers in up to 200 markets worldwide each year. EDC is financially self-sustaining, a recognized leader in financial reporting and economic analysis, and has been named one of Canada's Top 100 Employers for nine consecutive years.
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Media contacts:
Phil Taylor
Export Development Canada
Tel: (613) 598 2904
BlackBerry: ptaylor@edc.ca
