Voluntary Report - public distribution

**Date:** 12/16/2003

**GAIN Report Number:** CA3084

CA3084

**Canada**

**Strawberries**

**Market Update**

**2003**

**Approved by:**

![](media/image1.wmf)Gary Groves

U.S. Embassy

**Prepared by:**

George Myles

**Report Highlights:**

Canadian production of fresh strawberries slipped about 10% from last
year\'s crop to an estimated 22,500 metric tons. U.S. fresh strawberry
sales to Canada will exceed \$110 million during 2003 and capture about
98% of the Canadian import market. Canadian import demand for frozen
strawberries is on the increase, but Mexico and China are important
competitors.

Includes PSD Changes: Yes

Includes Trade Matrix: Yes

Unscheduled Report

Ottawa \[CA1\]

\[CA\]

**Table of Contents**

[Executive Summary 3](#executive-summary)

[Section I. Fresh Strawberries 3](#section-i.-fresh-strawberries)

[Production 3](#production)

[Consumption 4](#consumption)

[Prices 4](#prices)

[Trade 5](#trade)

[Trade 5](#__RefHeading___Toc59247257)

[Marketing 6](#marketing)

[Tariffs 6](#tariffs)

[Section II. Frozen Strawberries 7](#section-ii.-frozen-strawberries)

[Frozen Strawberry Imports 8](#frozen-strawberry-imports)

[Importers 8](#importers)

[Exchange Rates 9](#exchange-rates)

# Executive Summary

\*For 2003, Canada's bearing area for strawberries slipped to about
4,000 hectares, a decline of almost 15% from a year earlier. The post
estimate of total Canadian production during 2003 is 22,500 metric tons,
down 10% from the 2002 level of 25,068 metric tons.

\*U.S. strawberry exporters captured 98% of the Canadian import market
for fresh strawberries last year and U.S. fresh sales to Canada during
2003 are expected to exceed 56,000 metric tons, valued at more than
\$110 million.

\*Canadian import demand for frozen strawberries surged 24.2% during
2002 and rose another 13% during the first nine months of 2003. Most of
the increase reflects strong demand from Canada's food processing
sector.

\*Mexico and China are important competitors in the Canadian import
market for frozen strawberries.

# Section I. Fresh Strawberries 

## Production

In recent years, low profitability and variable spring weather
conditions have resulted in a steady decline in the total Canadian
bearing area for strawberries. For 2003, bearing area slipped to about
4,000 hectares, a decline of almost 15% from a year earlier. However,
despite indications that yields were improved over last year, the
increases were insufficient to offset the reduction in area. On balance,
the post estimate of total Canadian production in 2003 is 22,500 metric
tons, down 10% from the 2002 level of 25, 068 metric tons.

Provincial summaries: Reports indicate that the Ontario crop yield was
improved over 2002. In B.C. an average crop was expected although
production potential was reduced by sudden heat that brought on the crop
too fast with full ripening coming before complete size-up in some
fields. In Quebec, the provincial agriculture ministry reported that
weather conditions during the growing season varied widely from region
to region and that yields ranged from average to below average.

In 2003, Statistics Canada released the following revisions to fresh
strawberry historical production data (metric tons): 1997, 27,003; 1998,
27,672; 1999, 28,207; 2000, 25,826; 2001, 26,200.

![](media/image2.wmf)

## Consumption

Statistics Canada's most recent consumption data for fresh strawberries
is for 2001. Per capita consumption that year slipped to 1.95 kg from
the record level of 2.1 kg in 2000. Much of the decline was attributable
to lower imports from the United States in 2001, a year when U.S. fresh
strawberry output fell sharply resulting in reduced supply and higher
North American prices.

## Prices

Wholesale market prices for imported U.S. fresh strawberries during June
2003 were generally higher than a year earlier. Flats of 12 X 1 pint
from California were typically selling for C\$18.00-18.50 in Toronto
about C\$1.00 above the same offering one year ago.

##  

## Trade

In 2002, U.S. strawberry exporters captured 98% of the Canadian import
market for fresh strawberries. U.S. fresh sales to Canada reached 55,409
metric tons in 2002, almost 24% above the year earlier level when
overall U.S. export supplies of strawberries were lower due to a reduced
crop. The value of U.S. fresh strawberry exports to Canada in 2002
reached \$95 million. For 2003, U.S. fresh strawberry exports to Canada
advanced 3% in the January-September period. For all of 2003, they are
expected to exceed 56,000 metric tons, valued at more than \$110
million. Despite a strong rise in imports from Mexico during 2003, U.S.
exporters retained their dominance in the Canadian import market.

![](media/image3.wmf)

## Marketing

The peak marketing period for U.S. fresh strawberries in the Canadian
market is March through June, the months immediately preceding the peak
marketing period of the Canadian domestic crop (June & July). In 2002,
the province of Ontario was the number one destination for U.S. fresh
strawberry exports to Canada accounting for more than half of the total.
The table below illustrates Canadian imports of fresh strawberries from
the United States, by province. Note: Imports are based on the Customs
clearance point and may not represent province of ultimate destination.

![](media/image4.wmf)

## Tariffs

Under the FTA/NAFTA all import duties on U.S. fresh and frozen
strawberries, including any seasonal duties, were reduced to zero on
January 1, 1998. Beginning January 1, 2003 all duties on imports of
fresh or frozen strawberries from Chile and Mexico were reduced to zero
under the tariff provisions of the Canada/Chile Free Trade Agreement and
under the NAFTA. The MFN rate for fresh strawberries for table use is
free.

# Section II. Frozen Strawberries

![](media/image5.wmf)

## Frozen Strawberry Imports

Total Canadian import demand for frozen strawberries surged 24.2% during
2002. The trend to increased imports of frozen strawberries continued in
2003 as imports during the first nine months rose another 13% above the
year earlier rate. Most of the increase is due to strong demand from
Canada's food processing sector. Mexico and China are important
competitors in the Canadian import market for frozen strawberries. For
example, in 2000 imports of frozen strawberries from China captured only
4% of the Canadian import market. In the January-September period of
2003, China accounted for 15% of total Canadian frozen strawberry
imports. From 2000-2003, U.S. market share fell from 52% to 42%.

![](media/image6.wmf)

## Importers

Industry Canada lists the following as the major importers of record for
frozen strawberries: VALLEY MARKETING CORPORATION, Atwater, California; 
COMMERCE ALIMENTAIRE INTERNATIONAL VLM INC/VLM FOOD TRADING Kirkland,
Quebec; E D SMITH & SONS LTD Winona, Ontario; FRUITRADE INTERNATIONAL
INC Toronto, Ontario; GRIMMWAY ENTERPRISES, INC. Shafter, California;
GROUPE ALIMONCO INC Pointe-Claire Quebec; J M SMUCKER (CANADA) INC
Sainte-Marie, Quebec; KRAFT CANADA INC Toronto, Ontario; LES ALIMENTS
BRECON INC Pointe-Claire, Quebec; MARTIN-BROWER OF CANADA CO,
Mississauga, Ontario; MILLER & SMITH FOODS INC Mississauga, Ontario; OTC
FOODS INC L\'Île-Bizard, Quebec; PACIFIC COAST FRUIT PRODUCTS LTD
Abbotsford, B.C.; RELIANCE FOODS INTERNATIONAL INC Vaudreuil-Dorion,
Quebec; UNIFIN RICHARDSON BV St. Marys, Ontario; UNIVERSAL
FLAVORS-CANADA, INCORPORATED Mississauga Ontario.

## Exchange Rates 

Where prices and values in this report are expressed in Canadian
dollars, the exchange rates are: 1999, C\$=US\$.6730; 2000,
C\$=US\$.6733; 2001, C\$=US\$.6458; 2002, C\$=US\$.6368; December 2003,
approximately US\$ .7650.