SASKATOON, Sask. — Transborder carriers across the country should benefit from increased freight volumes this year but nowhere will the growth be felt more than in Saskatchewan.

Saskatchewan exports are expected rebound strongly to grow by 18 per cent this year, the highest in Canada, before declining by two per cent in 2005, according to a provincial outlook released by Export Development Canada (EDC).

"Saskatchewan exports were negatively impacted by U.S. wheat tariffs, a case of mad cow in Alberta, and the rising Canadian dollar," says EDC senior vice-president and chief economist Stephen Poloz. "Coming off this low base, we expect Saskatchewan to lead the country in export growth with a recovery in the agri-food sector, as well as solid growth in industrial and forestry goods."

Agri-food industry exports are expected to grow by 36 per cent in 2004, but will decline six per cent next year. Strong foreign demand in the wheat sector and higher crop productions during the 2003 growing season are behind the turnaround this year. However, precipitation levels, although forecast to be normal, may continue to remain low and jeopardize projections for 2004. This would prevent a full recovery from the drought of previous years. Over one half of the province’s agri-food exports are comprised of wheat and coarse grains, close to one-third oilseeds and other crops, and the remainder meat.

The beef and cattle industry in Saskatchewan was badly damaged by an isolated case of BSE in an Alberta cow last year. Although trade of boneless beef products has picked up in the U.S. and Mexico, live cattle exports to the U.S. are not expected to resume until later this year. Exports of meat products will remain relatively flat in 2004, but will jump by 14 per cent in 2005 as the ban on Canadian cattle is expected to be lifted.

The province’s exports of industrial goods are projected to strengthen from a 24 per cent decline in 2003 to an increase of 19 percent in 2004 and nine per cent in 2005. More than three-quarters of industrial goods exports are comprised of potash, followed by metals and minerals, including uranium, and chemicals. Growing world demand, low world inventories and higher farm incomes are key factors behind the forecast increase in this sector. However, uranium production was reduced last year following a flood at the McArthur River mine. The mine is expected to resume operating at full capacity this year. Uranium prices are rising more quickly than expected and are forecast to increase significantly over the next few years. Saskatchewan is the world’s largest producer and exporter of potash and uranium.

Saskatchewan’s energy exports are expected to remain flat this year, following 18 per cent growth last year, before declining in 2005. Energy production is predicted to remain mostly on par with last year, however, the value of energy exports will drop by two per cent in 2004 and by an additional nine per cent in 2005 due to an expected lowering in oil prices. Saskatchewan’s energy exports are comprised almost entirely of oil, followed by coal and electricity.

In 2003, exports from Saskatchewan decreased by 7.6 per cent to $10.3 billion. Exports sales in 2004 are forecast to surge by 18 per cent to $12.2 billion before declining by two per cent to just under $12 billion in 2005.
Agri-exports represent the province’s largest export sector at nearly 33 per cent, followed by energy exports at 32 per cent and industrial goods at 24 per cent. The U.S. absorbed $6.5 billion or 63 per cent of all export sales in 2003.

Nationally, the economy is expected to grow by three per cent in 2004 and by 3.3 per cent in 2005. Export sales should increase by six per cent this year and by two per cent next year.

A copy of EDC’s semi-annual Global Export Forecast is available at: http://www.edc.ca/docs/ereports/gef/EFindex_e.htm