Canadian wheat exports stall as blockades cost grain industry $9m per day

Canadian wheat exports have slowed for a second week as blockades around the country paralysed grain trading and logistics, siphoning off an estimated $9 million a day from the grain industry.

Wheat exports from Canada dropped 37% to 173,700 mt in the week to February 16 and were down 28% from the five-year average, data from the Canadian Agricultural Ministry showed on Friday.

The industry is suffering for the second week from protests against the construction of a natural gas pipeline, with activists blocking railroads across the country in a bid to halt it.

That has, in turn, halted grain deliveries to ports.

“Now there are 44 vessels at the anchorage at Port of Vancouver and 10 at Prince Rupert,” Wade Sobkowich, executive director of the Western Grain Elevator Association, told Agricensus.

The Port of Vancouver confirmed that blockades are causing operational trouble, saying 43 vessels were at anchor as of February 19, the majority of them grain vessels.

“Due to the recent disruptions in rail operations and protest activity, the demand for anchorages is currently exceeding the availability, causing a backlog of ships waiting to get into port,” Danielle Jang of the Vancouver Fraser Port Authority told Agricensus.

The disruptions have hit the speed of grain loading and have increased costs for companies as delays and fines eat into margins.

Calculating the exact cost of damage has been complicated given the unpredictability of the protests.

“The costs are very fluid. For the last few days, the grain industry has been losing $9 million per day,” Sobkowich said.

Terminal receipts of wheat rebounded 15% to 135,700 mt in the week to February 16, but growth was only seen in Vancouver as receipts fell between 24% and 88% at other ports, according to official data.

Weekly exports of wheat from Vancouver – the main grain trading hub of Canada – dropped 68% to 44,200 mt while shipments from Prince Rupert decreased from 77,000 mt to zero.

“Last week Prince Rupert was completely shut down. People came to work and received the salary but were loading nothing,” according to Sobkowich.

Overall wheat exports from ports were down 43% with the only growth seen in St Lawrence – the third-largest wheat trading hub by volume in the 2019/20 marketing year – where shipments increased to 109,000 mt from 52,000 mt.

Weekly exports of other grains were mixed with durum shipments up 148% to 70,500 mt and rapeseed shipments up 104% to 233,600 mt while barley loadings fell 78% and there were almost no exports of soybeans.

Looking at the five-year averages, weekly durum exports were down by 43%, barley shipments fell by 98%, soybean loadings dropped 99% while rapeseed exports were up by 28%.