Canada supplies roughly 20% of Colombia's wheat, but wheat imports face tariffs of 15 percent. Canada's market share could gain substantially as it expects to approve its own free trade deal with Colombia by the end of the year.

In 2006, the Bush administration negotiated a free trade agreement with Colombia, but Congress has not yet ratified the deal. President Obama and U.S. Trade Representative Ron Kirk have said they want to see the agreement passed once Colombia makes progress on labor and human rights issues.

The Colombian mills prefer U.S. wheat, in part because freight is cheaper, but may switch allegiances over the next 12-18 months if Canadian wheat had a tariff advantage. Presently, tariffs on U.S. wheat to Colombia range from 10%-15%, and can be as high as 124%.

"If we do not have this agreement ratified with Colombia and our competitors are able to access the market at zero tariff, we will lose our dominant position," said Alan Tracy, president of U.S. Wheat Associates. "Argentina has already gained duty-free access to Colombia, and the European Union is working on a similar trade pact."

The switch for flour millers between sources of wheat can be difficult, which may delay Colombian millers replacing U.S. wheat with lower cost alternatives if there are strong political signals that the U.S. government will pass the free trade agreement. Tracy noted, ""If they don't know they're ever going to get U.S. wheat at duty-free, then ... in their minds, they might as well start making the switch."

- Colvin