World Feed Pea Markets Strengthen

VANCOUVER - Apr 28/06 - SNS -- International feed pea markets continued to strengthen during the past week, with solid increases noted in both European spot and new crop shipping positions.

This is not readily translating into stronger domestic markets in western Canada, however, because of the strength of the Canadian dollar, which spent much of the week around 89 cents U.S. -- its highest levels since 1991.

More importantly, currency traders now believe the Canadian dollar will approach the 94 cent are in the coming marketing year. Optimism about the currency's outlook is demonstrated every day on futures markets, with the deferred dollar trading at a premium to spot.

The positive outlook for the dollar is being reinforced by efforts by the Bank of Canada to cool down a red hot economy and offset the inflationary impact of a tight labor market, a promised reduction in the country's tax on goods and services, and strong oil and fuel markets.

Higher interest rates will initially support the dollar, with the result Canadian exporters will face ever increasing costs of doing business and an ever decreasing return on export sales. Despite these challenges, Canada's field pea exporters remain confident in their ability to effectively market a larger crop and maintain a solid share of international feed pea markets.

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