Wheat in the ASEAN region: Opportunities for Canadian companies in the Philippines, Singapore and Vietnam

This report considers the market opportunities for Canadian wheat in three countries in the Association of Southeast Asian Nations (ASEAN) region: the Philippines, Singapore, and Vietnam. The other members of this region are: Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar and Thailand.

This information is useful for Canadian exporters in this sector that are interested in the ASEAN market and taking advantage of enhanced trading opportunities with certain ASEAN members, such as those created by the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP).

Note: Unless otherwise noted, the information in this report has been compiled using 2017 UN Comtrade data and refers to wheat as defined by Harmonized System Code (HS) 10.01 – Wheat and meslin.

This report was commissioned and overseen by the High Commission of Canada to Singapore, and was prepared by a consultant. Although every effort has been made to ensure that the information is accurate, Agriculture and Agri-Food Canada (AAFC) assumes no liability for any actions taken based on the information contained herein.

Summary

The following sections summarize the market potential for Canadian wheat exports by country, presenting key market metrics and an overview of market opportunities and challenges.

The Philippines wheat market potential summary

Canada’s wheat exports to the Philippines have grown, albeit from a low base. Demand can be volatile and price sensitive. Canada’s market share remains small.

Overview of key metrics
Metric Philippines
Total imports (2017) 5,499,996 tonnes
Growth in import market size by volume (Compound Annual Growth Rate (CAGR) 2013-2017) +17.32%
Total import demand (2017) Can$1,690 million
Growth in volume of imports from Canada (CAGR 2013-2017) -13.68%
Main suppliers in 2017 and their market share in percent of total tonnes imported USA: 47.7%
Australia: 35.4%
Ukraine: 11.4%
Canada: 2.6%
Change in Canada's market share from 2013-2017 (percentage point change) -9.36%
Competition level High
"Temperature" of the overall market opportunity Hot

Opportunities:

Challenges:

Singapore wheat market potential summary

Singapore’s small milling wheat market is dominated by a single miller. End user demand is expected to grow more slowly in the future, in line with slowing population growth and a mature market. Although Singapore has a small domestic market for consumption of Canadian wheat, it is still regarded as a key market.

Procurement decisions for Canadian wheat from major customers are made in Singapore. These key end users include Prima (who procures for their large milling facility in Sri Lanka), Wilmar (for plants in China) and Interflour. There are also large traders including Cargill, Olam and Agrocorp.

Overview of key metrics
Metric Singapore
Total imports (2017) 250,466 tonnes
Growth in import market size by volume (CAGR 2013-2017) +8.3%
Total import demand (2017) Can$65.9 million
Growth in volume imports from Canada (CAGR 2013-2017) +1.4%
Main suppliers in 2017 and their market share in percent of total tonnes imported Australia: 58.8%
USA: 33.9%
Canada rank: 4.2%
Change in Canada's market share from 2013-2017 (percentage point change) -1.1%
Competition level Moderate
"Temperature" of the overall market opportunity Cool

Opportunities:

Challenges:

Vietnam wheat market potential summary

Vietnam, with its booming economy, is considered to be a very promising wheat market for Canada, particularly now that the CPTPP is in force—and the US has opted out of the regional trade agreement.

Overview of key metrics
Metric Vietnam
Total imports (2017) 4,663,827 tonnes
Growth in import market size by volume (CAGR 2013-2017) +14%
Total import demand (2017) Can$1,289 million
Growth in volume imports from Canada (CAGR 2013-2017) +68.4%
Main suppliers in 2017 and their market share in percent of total tonnes imported Australia: 40.0%
Canada: 20.3%
Argentina: 17.8%
Russia: 15.2%
Change in Canada's market share from 2013-2017 (percentage point change) +13.1%
Competition level Moderate
"Temperature" of the overall market opportunity Very hot

Opportunities

Challenges

Trends in wheat consumption and import demand

In recent years, demand for wheat for flour and feed wheat have been growing. Data from Euromonitor International suggests that growth in end user demand for milling wheat has been strongest in the Philippines and weakest in Singapore. There is also a significant and growing demand for feed wheat in Vietnam and the Philippines.

Growth in flour consumption in tonnes over time
Country 2012 2013 2014 2015 2016 2017 Compound Annual Growth Rate (CAGR)
Philippines 535,463 556,610 580,729 601,502 623,190 648,334 3.9%
Singapore 89,874 91,863 93,720 95,422 97,021 98,622 1.9%
Vietnam 479,292 504,018 509,001 516,483 528,656 545,413 2.6%
Source: Euromonitor International

The Philippines and Vietnam both rank in the top 20 global wheat import markets by volume. Constrained by its population size, Singapore is a relatively small wheat market, only one twentieth the size of the Philippines’ import market in value terms (US$50.8 million versus US$1.3 billion).

Canada’s top export destinations for wheat in 2017
Rank Country Tonnes (thousands)
1 USA 2,777
2 Japan 1,713
3 Indonesia 1,713
4 Bangladesh 1,256
5 Peru 1,232
6 Algeria 1,230
7 Vietnam 982
8 Colombia 953
9 Nigeria 876
10 Mexico 834
11 Morocco 718
12 Italy 648
13 China 594
14 Ecuador 541
15 UAE 454
16 United Kingdom 360
17 Sri Lanka 359
18 Ghana 298
19 Venezuela 260
20 Philippines 246
21 Chile 234
22 Brazil 176
23 Republic of Korea 167
24 Malaysia 158
/55 Singapore 3.2
Source: UN Comtrade, Intercedent Asia
The world’s top importers of wheat in 2017
Rank Country Tonnes (thousands)
1 Indonesia 11,435
2 Egypt 11,410
3 Algeria 8,079
4 Italy 7,416
5 Japan 7,507
6 Nigeria 5,862
7 Philippines 5,500
8 India 5,347
9 Spain 6,182
10 Brazil 6,022
11 Mexico 4,901
12 Turkey 4,991
13 China 4,296
14 Netherlands 5,175
15 Vietnam 4,664
16 Republic of Korea 4,221
17 Belgium 4,471
18 Morocco 3,630
19 Germany 4,147
20 USA 3,287
21 Sudan 2,168
22 Peru 2,124
23 Colombia 1,891
24 United Kingdom 1,893
/68 Singapore 250
Source: UN Comtrade, Intercedent Asia

The Philippines

The Philippines does not produce wheat commercially, making wheat one of its leading agricultural imports. It is also a large wheat consumer by ASEAN standards, second only to Indonesia.

Wheat consumption in the Philippines is expected to rise due to:

The Philippines’ wheat imports from 2000-2017, in thousands of tonnes and millions of dollars
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Year Imports (Can$ - Millions) Tonnes (thousands)
2000 580.7 2,655
2001 751.1 2,891
2002 820.0 3,104
2003 656.0 2,756
2004 497.7 2,158
2005 457.0 2,052
2006 614.0 2,758
2007 469.5 1,798
2008 772.2 1,707
2009 942.5 3,071
2010 563.5 1,976
2011 944.9 2,768
2012 973.9 2,999
2013 894.9 2,474
2014 1018.9 2,869
2015 1255.8 3,385
2016 1378.3 4,626
2017 1690.0 5,500

Source: UN Comtrade, Intercedent Asia

According to the Philippine Association of Flour Millers, total milling wheat industry capacity for the Philippines reached 16,890 tonnes per day, and 5,067,000 tonnes per year (300 days) in 2017. Milling wheat imports in 2017 amounted to 2,600,000 tonnes, with local milling industry capacity utilization being just 51.3%.

The Philippines’ annual milling capacity growth from the 1960s to 2020s in millions of tonnes
Time period Philippine Association of Flour Millers Chamber of Philippine Flour Millers Independent and new flour mills Total milling capacity
1960s-80s 2.46 Not available Not available 2.46
1990s 2.52 1.43 Not available 3.95
2000s 2.52 1.43 0.23 4.18
2010s 2.57 1.6 0.9 5.07
2020s (Forecast) 2.61 1.97 1.27 5.85
Source: Philippine Association of Flour Millers

Following several years of rapid wheat consumption and import growth in volume terms, the Fitch Solutions Philippines AgriBusiness Report published in Q2 2019 predicted continued robust 5-6% growth per year in the Philippines' wheat demand through 2023.

Singapore

Having no agricultural land and limited local food production, Singapore imports almost all of the food it needs. The Singapore market for wheat is quite mature and relatively small at 250,000 tonnes per year. Growth in Singapore’s demand for wheat has been mainly due to the impact of large scale immigration. Non-residents accounted for only 3.2% of Singapore’s labour force in 1970; by 2000, this share had risen to over 28% and is now around 38%. That said, population growth a decreased, which may impact Singapore’s future domestic consumption.

Singapore’s wheat imports from 2000-2017, in thousands of tonnes and millions of dollars
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Year Imports (Can$ - Millions) Tonnes (thousands)
2000 31.4 127
2001 41.1 160
2002 35.9 141
2003 42.4 172
2004 41.6 157
2010 51.1 181
2011 65.0 170
2012 57.9 168
2013 64.4 172
2014 70.6 191
2015 66.1 173
2016 67.5 204
2017 65.9 250

Source: UN Comtrade, Intercedent Asia

Vietnam

In Vietnam, wheat is the second staple, after rice, with total wheat imports increasing in recent years to reach an estimated 4.7 million tonnes in 2017, valued at almost Can$1.3 billion. This sector is broadly supported by the strong feed demand and by the rising popularity of bakery and other wheat products among consumers. According to the Vietnam Grain and Feed Annual 2018 (USDA Foreign Agricultural Service), Vietnam imports roughly equal volumes of milling and feed wheat. In fiscal year 2018-19, imports were expected to be 4.5 million tonnes. Milling wheat accounts for two million tonnes of that, while feed wheat was at 2.5 million tonnes.

Animal protein consumption has been increasing in Vietnam and the trend is expected to continue in line with the country's rapid economic growth and regional trends. Vietnam's national feed market is expected to grow about 3% annually and it remains the largest commercial feed market in ASEAN.

In the main cities, partly reflecting a legacy of French cuisine, people consume many wheat-based foods, including bread and baguettes. While consumption of wheat-based foods is still largely limited to the larger cities, it is quickly spreading to second-tier cities. As a result, the consumption of milling wheat is still small, but will continue to grow. Demand for wheat-based foods in Vietnam by consumers is further boosted by the following factors:

Total wheat consumption is projected to see a strong growth at a 5% compound annual growth rate (CAGR) from 2019 to 2022 according to the Fitch Solutions Vietnam Agribusiness Report published in Q2 2019.

Vietnam’s wheat imports from 2009-2017, in thousands of tonnes and millions of dollars
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Year Imports (Can$ - Millions) Tonnes (thousands)
2000 115.6 572
2001 156.9 709
2002 178.3 826
2003 176.2 758
2004 211.8 821
2005 243.1 1,018
2006 256.6 1,248
2007 369.1 1,223
2008 312.5 702
2009 394.8 1,386
2010 586.8 2,221
2011 805.3 2,431
2012 769.6 2,424
013 638.0 1,817
2014 716.6 2,076
2015 768.3 2,329
2016 1330.9 4,744
2017 1289.3 4,664

Regulatory requirements

This section provides important regulatory import requirements for wheat exports to the Philippines, Singapore and Vietnam.

The Philippines

Canada's Trade Commissioner Service in the Philippines reports no undue sanitary or phytosanitary non-tariff barriers that would impede imports of Canadian wheat. The health and phytosanitary regulations and procedures are broadly similar for all types of agri-food products. However, it is the responsibility of the importer to ensure products coming into the Philippines are in compliance with local health and phytosanitary regulations. The enforcing authorities check for compliance by inspecting the goods and relevant documentation.

The Philippines Department of Agriculture requires importers to obtain a sanitary and phytosanitary permit prior to shipment of any agricultural product. This requirement is an additional expense, can complicate the timing of exports, and prevents the rerouting to the Philippines for products initially destined for third markets. The regulation also prevents exporters from reselling their wheat exports in the Philippines should their original importer refuse to accept their shipment, or abandon it for any reason.

Singapore

Singapore is well known for its ease of doing business, including the near-absence of non-tariff barriers. As shown in the table below, Singapore ranks first in the world as having the least number of non-tariff barriers.

Global ranking of non-tariff barriers
Country Ranking for least number of non-tariff barriers
Singapore 1
Malaysia 16
Philippines 42
Canada 55
Thailand 61
Indonesia 73
Vietnam 124
Source: The Global Competitiveness Report 2018, World Economic Forum

Note: The World Economic Forum asked: “In your country, to what extent do non-tariff barriers (for example health and product standards, technical and labelling requirements) limit the ability of imported goods to compete in the domestic market?”. A lower value is positive, meaning limited non-tariff barriers to trade.

Vietnam

The Vietnam Ministry of Agriculture and Rural Development (MARD)’s Plant Protection Department (PPD) is responsible for safeguarding the country’s crop production, including surveying and monitoring imported plant products coming from overseas. Vietnam’s concerns over the introduction of creeping thistle into the country has lead to increased supervision of imported plant products, including wheat, soybeans, peas, and others, from major foreign suppliers where the weed seed is prevalent, including Canada, the U.S., and the EU. Canadian wheat exporters are encouraged to consult their industry association should they have questions on this topic. Their association will be able to provide greater detail and coordinate with Agriculture and Agri-Food Canada as needed.

Competitive environment

Singapore, the Philippines and Vietnam are all net importers of wheat, producing none of their own. Leading competitive suppliers include the US and Australia. The US has a lower market share in Vietnam, which is perhaps surprising given Hanoi’s desire to manage its large overall trade surplus with the US. Russia, Eastern Europe and Latin America are also major competitors in the ASEAN wheat markets.

The Philippines

Canada's market share will likely remain under pressure due to increased competition from Black Sea and Latin American wheat sources. Australian wheat is also available to the Philippines at a lower cost when compared to Canadian wheat due to their free trade agreement, the ASEAN-Australia-New Zealand Free Trade Area (AANZFTA).

The Philippines is a major importer of milling quality wheat. Imports of wheat in 2017 reached 5.5 million tonnes and the local flour industry is operating at roughly 50% of capacity. There are 21 flour mills with a total capacity of over five million tons. Milling wheat imports are exempt from "Most Favoured Nation (MFN)" tariffs, but are subject to a 12% Value Added Tax (VAT) on subsequent flour sales. Feed wheat imports are subject to a 7% MFN duty, but are not subject to VAT.

Singapore

The Singapore wheat market is dominated by suppliers from Australia and the US, which together account for 92.7% of its wheat imports by value. Canada is the third largest supplier, but from 2013 to 2017 it has seen its market share slip by a percentage point, from 5.3% to 4.2% of the import market.

For discerning customers, Canadian wheat is reportedly always one of the first choices in Singapore. Australian wheat has a somewhat different usage than Canadian wheat and is not a direct substitute. Prima, the largest purchaser of wheat in Singapore, will typically source from Canada and the US.

The US is a direct, high-protein competitive threat to Canadian wheat. Black Sea wheat, which is mid-to-low in protein, has been improving in quality and may make inroads into the Singaporean market. China does not export wheat to Singapore in any significant amount, but as a huge consumer of wheat, it can move the market in terms of global pricing.

With very little animal husbandry, the Singapore market for feed wheat is small.

Vietnam

Data from Global Trade Tracker, based on reporting countries' exports of wheat to Vietnam, indicate that:

In terms of quality, Australia remains the preferred source for milling wheat. However, lower-quality wheat from Russia is increasingly being accepted in Vietnam, particularly if there is a significant price differential. The lower selling price of flour produced using Russian wheat is offset by the duty-reduced import price. Vietnam has now adjusted to using cheaper Black Sea-origin wheat, posing a threat to similar quality wheat. Vietnam also imports feed wheat from Eastern European countries, such as Romania, Bulgaria, and the Eurasia Economic Union countries.

Buyer preferences

Suffering from significant overcapacity, Vietnam and the Philippines are highly price sensitive wheat markets. In line with changing end user needs, premium-quality milling wheat is more in demand, especially in Singapore.

The Philippines

The market environment for flour millers in the Philippines is highly competitive, resulting in increased price sensitivity. Major importers are looking for bulk discounts from foreign exporters of milling wheat, while the top corporate buyers of wheat in the Philippines look for and expect a range of characteristics when purchasing products and dealing with businesses' notably:

Due to the US’s aggressive efforts in the Philippines, it has been challenging for local companies consolidating wheat imports with other flour millers to import from other source countries. While established procurement managers are reportedly satisfied with the performance of US wheat, procurement managers new to their roles appear more open to importing from other countries that are known to export quality wheat.

Lastly, and according to the Trade Commissioner Service in the Philippines, it has reportedly been challenging for some of the major flour milling companies requiring both soft and hard wheat to import consolidated shipments of both wheat varieties from Canada.

Singapore

Quality requirements are very specific in the Singapore market. The key customer, Prima, prefers to use US wheat for its high-protein content. Quality remains a critical selection criteria.

End users, such as the large bakery chain Gardenia, ultimately drive product preference. Prima in Singapore works closely with these companies to develop and tailor products to individual customer needs and keep abreast of any changes in product preferences. Some customers do not have sufficient volume to buy direct and must therefore communicate their product requirements along the supply chain.

Vietnam

A key factor for buyers choosing between feed wheat and other feed ingredients is wheat's selling price compared to corn. This price dynamic recently resulted in large volumes of feed wheat imports into Vietnam. When the gap between feed wheat and corn prices narrow, millers prefer feed wheat due to a variety of reasons including protein content, colour and binding factors.

Stiff competition from foreign-owned mills has led to low industry capacity rates of about 60% in Vietnam milling. The intensifying competition in the wheat milling sector, ahead of anticipated future wheat demand, is adding to price sensitivity in the market.

There is a trend for increasing demand for top-quality wheat used for higher quality wheat-based products introduced by western cafés and food outlets in Hanoi's and Ho Chi Minh City's trendy cafes and bistros. Consequently, demand is increasing steadily for premium quality milling wheat. Reportedly, millers already are familiar with the quality of Canadian wheat and can cite the various varieties.

Overview of importers and distributors

The Philippines

According to the Philippine Association of Flour Millers, there are currently 21 companies engaged in flour milling in the Philippines, up from eight mills in 1980s. Another two investments in mills are pending. According to the Philippine Association of Flour Millers, in the Philippines flour millers are affiliated with one of three groups:

Members of The Philippine Association of Flour Millers, including:

  1. RFM Corp
  2. Liberty Flour Mills Inc
  3. Wellington Flour Mills
  4. Pilmico Foods Corp
  5. General Milling Corp
  6. Universal Robina Corp
  7. Philippine Flour Mills

Members of the Chamber of Philippine Flour Millers, including:

  1. San Miguel Mills Inc
  2. Philippines Foremost Milling Corp
  3. Morning Star Milling Corp
  4. Delta Milling Industries Inc

Independent millers, including:

  1. Monde Nissin Corp
  2. Atlantic Grain Inc
  3. Asian Grain Inc
  4. New Hope Flour Milling Corp
  5. Great Earth Industrial Food Inc
  6. North Star Flour Mill
  7. Mabuhay Interflour Mill
  8. Agripacific Corp (REBISCO)
  9. BIG-C Agri Miller
  10. California Flour Mill Group

Singapore

While Singapore is a relatively small end user market for wheat, its importance is greater than the domestic market size would suggest. This is due to the regional presence of large trading companies, including:

Smaller traders will also buy wheat and distribute locally and regionally, but usually sporadically and in small volumes.

In Singapore, end users of milled wheat include large bakeries and noodle manufacturers.

Singapore flour demand by product in 2017
Product Share of demand
Bakery products, bread and pastries 56.4%
Noodles 20.2%
Cookies and crackers 6.8%
Pasta 3.7%
Others 12.9%
Source: Euromonitor International

Vietnam

According to Miller Magazine's Grain and Flour Market in Vietnam article, in the beginning of 1990s, flour was imported for Vietnam's flour and bakery products industry. Then came investment in domestic wheat milling capacity and wheat imports replaced flour imports. It is estimated that there are around 30 flour mills in Vietnam, half of which control 60-70% of the domestic market.

A summary of leading flour mill companies in Vietnam
Company Capacity (tonnes per day of wheat, or equivalent)
Binh Dong Flour Mill Co 920
Dai Phong Co Ltd 200
Lua Vang Flour Mill 250
Interflour Vietnam Co Ltd 1,000
Mekong Wheat Flour Processing Company 800
Saigon Flour Mill/Phuoc An 200
Tien Hung Co Ltd 400
Uni President Flour Mill/Uni President Enterprises Corp 250
Vietnam Flour Corporation (VIKYBOMI) 300
Vietnam Flour Mill (two mills) 1,300
Vimaflour Ltd 1,500
Source: World Grain, Focus on Vietnam

Other companies include:

Supply chain dynamics

The Philippines

Most of the big players source directly from Canada. These would include companies such as San Miguel Milling Corp and the Universal Robina Corporation. There are also a number of smaller importers. New investment in milling in the Philippines is reportedly occurring as companies leverage the scale benefits of the ASEAN Economic Community.

In the Philippines, the leading end users of flour include:

End users of milled wheat include large bakeries and noodle manufacturers. Within the bread industry, large producers, such as Gardenia or Julies, have a 20% share of the market players, small mom and pop bakeries making up the balance. Noodle sales are dominated by Monde Nissin (60% share), Universal Robina (17%) with small factories making up the balance.

The Philippines demand for milling wheat by product in 2017
Product Tonnes (thousands) Share of demand
Bakery products 1,146 55.0%
Noodles 437 21.0%
Cookies & crackers 375 18.0%
Pasta 42 2.0%
Others 83 4.0%
Source: Philippine Association of Flour Millers Inc.

Singapore

The supply chain dynamics are fairly straightforward for milling wheat in Singapore in part due to the concentrated buying power of the country's sole miller, Prima Ltd.

Snapshot of Singapore's wheat distribution and supply chain dynamics

There are a variety of paths for how wheat could be distributed in Singapore. For example, an exporter can use Singaporean flour mills to reach domestic users of bakery products, or they could interact with other members in the regional supply chain such as trading companies or regional flour mills. This chart shows a few of the options:

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Chart showcasing a range of four paths for how wheat could be distributed.

  • Path 1: “Wheat exporter” to “Singapore-owned and operated flour mills (Example: Prima Ltd.)” to “Domestic distributors” to “Domestic (Singaporean) end users of bakery products”
  • Path 2: “Wheat exporter” to “Singapore-owned and operated flour mills (Example: Prima Ltd.)” to “International distributors” to “Domestic (Singaporean) end users of bakery products”
  • Path 3: “Wheat exporter” to “Singapore-owned regional flour mills (Example: Interflour)”
  • Path 4: “Wheat exporter” to “Singapore-based trading companies”

Vietnam

Vietnam's supply chain for wheat is complicated and laborious. Millers have to pay for their wheat upon loading, but may not get paid for their flour until six months later. As the cost of wheat is the biggest supply chain cost, millers are focused on procurement and some companies have centralized wheat procurement teams, usually headquartered in Singapore. They look to extract value right across the supply chain, including freight and logistical efficiencies like combo loading.

Vietnam's flour consumption is low compared to other countries in the region and bakery products account for only 25% of wheat flour use. The rapid growth of the economy, the increase in disposable income and the culture of eating bread/bakery goods suggest that consumption will continue to grow.

Vietnam flour demand by product in 2017
Product Share of demand
Bakery Products 25.1%
Noodles 55.4%
Cookies & Crackers 8.1%
Pasta 2.2%
Others 9.2%
Source: Euromonitor International

CPTPP implications

As of April 2019, seven signatories of the CPTPP agreement, including Singapore and Vietnam, have implemented the second round tariff cuts. A third round of tariff cuts will take place on January 1,2020, except for Japan which operates on a fiscal year (April 1,2020).

Four other CPTPP countries still await domestic ratification before implementing their tariff cuts: Brunei, Chile, Peru and Malaysia. The CPTPP will enter into force 60 days after a signatory notifies the CPTPP Depository that it has completed its ratification procedures.

Going forward, economies that meet the high standards of the CPTPP may join the Agreement by accession, potentially furthering the economic benefits for Canada. To date, no economy has formally requested to commence the accession process. Economies that have publicly expressed interest in acceding to the CPTPP include: Thailand, South Korea, the United Kingdom, and Taiwan.

The Philippines is not a member of the CPTPP, leaving Canadian wheat at a competitive disadvantage versus Australian wheat. Under the ASEAN-Australia-New Zealand FTA (AANZFTA), both milling and feed wheat imports to the Philippines from member countries are duty-free. Some business groups in the Philippines have expressed anxiety about the ability of its exports to compete with those of Vietnam under the CPTPP.

Canadian companies are encouraged to visit CPTPP for Agri-Food Exporters to find more general information on this agreement and how it can benefit your exports to its markets.

CPTPP wheat tariff reduction in Vietnam

Under the CPTPP, Vietnam has dropped its 5% import tariff on Wheat (HS 10.01) since Jan 15 2019. Currently, Canadian wheat and meslin are duty-free to Vietnam. This provides Canada with a competitive gain as compared with non-CPTPP countries.

Some competitors already enjoyed preferential tariffs on wheat exports to Vietnam. Australian wheat has zero duty access to Vietnam under the Australia-Vietnam Free Trade Agreement, which came into force in 2016. The Vietnam-Eurasia Economic Union (VN-EAEU) FTA, effective in October 2016 also allows duty-free wheat imports from Russia, Belarus, Kazakhstan, Armenia, and Kyrgyzstan.

CPTPP wheat tariff reduction in Singapore

Canadian wheat exports to Singapore was duty-free before the CPTPP and will continue to be under it. There are no scheduled tariff reductions on wheat, and consequently no change in Canada's competitive position.

Generally, Singapore is virtually a free port (except for tobacco, alcohol, vehicles and gasoline). The only significant benefit of the CPTPP in the merchandise agri-food sector is that Canadian beer will be exempt from a $16/litre alcohol tariff.

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