Discussions:
Canada, France and USA reveal a higher degree of comparative advantage, Relative Trade advantage and Revealed Competitiveness.
USA : (interpretations made from discussion boards on Agri Marketing Research centre website www.agmrc.org & related research paper by Gary Brester (2012) Prof, Dept. of Agriculture Economics, Montana State University.)
- Wheat is the third largest field crop produced by USA. While in USA Wheat acreage is on a decline due to various factors which include, increased demand of corn, However, being 125 % more costly wheat is still the main livestock feed so that’s a positive RCA for wheat.
- Although Wheat is mostly a commodity, some value added variety is manufactured at special price premiums
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East Europe developing special infrastructure to enhance wheat production, some new technologies related to genetic improvement, disease control etc have increased yield of soya bean and other crops, but such tech is yet to be developed for wheat crop.)
FRANCE : (Based on facts provided in USDA/NOAA economic and joint agricultural statistics.)
- France is fourth largest producer of wheat and the sixth largest consumer. France also is the largest wheat producer in Europe and exports mainly to other euro nations.
- France is entering in the emerging markets with revised strategies by upgrading its infrastructure for shipments outside EU. Furthermore, France has had notable success winning milling wheat orders from Egypt's Gasc grain authority, which enforces lower quality hurdles than some other buyers.
- Favourable exchange rates (support to the competitiveness of French exports from weakness in the euro) are also a reason for the last five year trade, giving a higher average for the comparative indices.
- Challenges for sustaining the trade advantage : Less than half of the wheat produced meets the international quality specs and so cost trade off exists lowering the potential of CA. Secondly lower export forecasts for next few years