Canada’s food manufacturers, battling rising costs and a weak US dollar, should look further afield for growth, according to industry analysts Rabobank .
With the Canadian dollar appreciating against a weak US dollar, the country’s food makers need to look to markets like Mexico, Brazil, China and India, Rabobank said.
“Canadian food processors have historically been able to prosper by making the most of their domestic market and their access to the US market,” said Rabobank food and agribusiness research and advisory vice president Stephen Rannekleiv. “However, because the US dollar is not expected to strengthen in the near future, the US market will remain challenging for Canadian exporters.”
Previously, Canadian food processors have benefitted from their shared boarder and minimal trade restrictions with the US.
However, for many Canadian companies, the cheaper Canadian dollar was a source of competitiveness. With the decline of the US dollar, this advantage has been reduced.
Rannekleiv added: “To remain competitive and profitable, Canadian food processors will increasingly need to identify growth markets that will allow them to leverage their production capacity and increase their scale.”