(REGINA) – Friday, May 14, 2010 – Saskatchewan exports are forecasted to grow by a modest 1 per cent this year before being followed by a more forceful rebound of 10 per cent in 2011, according to its Provincial Export Forecast released today.
The sharp correction in commodity prices from peak levels has largely run its course, but there is little reason to anticipate a renewed surge," said Peter Hall, Chief Economist at EDC. "A mix of supply and market access issues is taking the lead in shaping how Saskatchewan's exports will fare in the near term.
"EDC is looking for the province's oil and fertilizers sectors to embark on a turnaround in 2010 at the same time that agri-food and uranium shipments exert a sustained drag. The real strength for Saskatchewan in 2010 will be led by potash, although is has a large gap to narrow to return to pre-crisis sales."
The agri-food sector accounts for 37 per cent of the province's exports, and EDC expects a 12 per cent decline in 2010 before a modest increase of 2 per cent in 2011.
EDC's forecast points to a combination of soft pricing, less buoyant production, and unresolved barriers to trade for the sector in 2010. Exports of canola seed face a potentially signficant hurdle given that Chinese officials have recently confirmed that shipments bearing traces of blackleg disease will be barred altogether next season. U.S. import restrictions on salmonella-infected canola meal shipments pose a further challenge up the value chain. The processing segment of the industry faces a more favourable outlook, with China set to raise its canola oil imports from Canada substantially this year, and new crushing capacity coming on line in Clavet and Yorkton.
The energy sector accounts for 34 per cent of the province's export total, and EDC forecasts that the sector will grow by 10 per cent in 2010 before slowing to 4 per cent growth in 2011. While Saskatchewan's oil production dynamics are expected to be lacklustre over the forecast horizon, exports will benefit from a forecast 10 per cent increase in the global price of crude in 2010. Further price growth in 2011 will be marginal, but strong enough to offset a forecast 1 per cent drop in volumes. Mild growth of light crude output from Bakken will be weighed down by sustained declines in conventional production of heavy oil.
Rounding out Saskatchewan export picture are the ferttilizer sector at 17 per cent of the province's total exports, followed by the chemicals sector at 4.4 per cent.
Canadian exports are forecast to rise 11 per cent in 2010 and 7.6 per cent in 2011. Nationally, economic growth is expected to rise 2.5 per cent in 2010 and 2.9 per cent in 2011. Internationally, EDC is forecasting global growth of 3.7 per cent in 2010 and 4.2 per cent in 2011. 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 8,400 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 recognized as one of Canada's Top 100 Employers for nine consecutive years.
-30-
Media contacts:
Phil Taylor
Export Development Canada
Tel: (613) 598-2904
Blackberry: ptaylor@edc.ca
