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Competing with Russian wheat

Newer wheat classes provide an opportunity to serve Mexican markets that don’t need CWRS

Western Canadian wheat classes such as Canada Prairie Spring Red (CPSR) and the new Canada Northern Hard Red (CNHR) have recently been attracting attention from Mexican millers to meet their end-uses.

Senior managers from Grupo Trimex, Mexico’s largest milling company and a customer of CWRS, attended a one-week technical exchange at the Canadian International Grains Institute in Winnipeg in June following a first-time visit by Cigi staff in Mexico last February.

Investigating other Canadian wheat classes was one reason Grupo Trimex accepted the invitation, according to one participant. The technical exchange featured hands-on demonstrations in Cigi’s facilities including the pilot mill and bakery as well as a tour of a Manitoba seed farm and a terminal elevator in Ontario.

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“Mexico is a huge market which imported 4.6 million tonnes of Canadian wheat over five years to 2015, or about 17 per cent of their total,” says Juan Carlos Arriola, head of Cigi milling technology. “The Canadian imports averaged about one million tonnes per year but then dropped to about 700,000 MT in 2015-16 mainly because they bought more Russian wheat.”

Arriola says in his past experience working as a head miller in Latin America, Russian wheat was not considered a viable alternative to Canadian wheat. However, when in Mexico, Cigi staff discovered a significant amount was imported due to price, availability and improved quality.

Mexican milling companies import wheat from other origins as well, he says, such as France and the Black Sea region, often through brokers. While Canada exports mostly high-protein, high-quality CWRS, some customers purchase “grocery vessel” shipments of different quality and protein wheats from competitor countries for use in various types of bread.

Bread applications using CWRS are only 25 to 35 per cent of the Mexican market, Arriola says. “CWRS is often used for blending with local or other wheat to improve strength rather than using wheats like CPSR and CWRW because there is not always enough availability or knowledge about the different Canadian wheat classes.”

Luis Cortes, Grupo Trimex’s operations and technical director who is responsible for the operation of 10 mills across Mexico, says his company makes its own wheat purchases and imports about 200,000 MT of Canadian wheat annually, 99 per cent being CWRS. In total, Grupo Trimex imports about 1.2 million tonnes annually of which 70 per cent is from the U.S. as well as from Russia, Ukraine and France in addition to local wheat.

Cortes says his company mills a range of flours from low-protein cake flour to high-protein industrial bakery flours. Few of their customers require 100 per cent CWRS although some do for premium products.

“About 80 to 90 per cent of our production involves blending wheats, so we can use CPSR, CNHR or CWRS,” Cortes says. “Since Cigi’s visit to Mexico in February we found there are these other milling classes available. We have seen the (milling and baking) performance results of CNHR, all the technical data, and it looks very promising.”

Cortes says his four colleagues on the technical exchange also included the manager of the largest mill in Latin America and manager of the company’s second largest mill. “I asked them to come to Cigi as well because they are the largest users of CWRS and would likely be the first to use CPSR or CNHR.”

Meeting with Cigi technical staff in Mexico and coming to Winnipeg has opened doors, he says, adding that also establishing close working relationships with wheat suppliers is key to doing business with Grupo Trimex.

“The relationship with traders is very important for us,” Cortes says. “We need partners who can provide solutions for our needs.”

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