Union appeals to Trudeau govt. to buy the Canadian Wheat Carton owned by Saudi Arabia

A trade union representing port and transport workers in Churchill, Man. calls on the Canadian government to buy back the Canadian Wheat Board, which was sold in 2015 to a Saudi state investment group for agriculture.

The Union of Canadian Transportation Employees said Thursday in a press release that the Saudi government's decision to stop buying Canadian grain proves that it is not trustworthy to defend the interests of Canadian farmers. Saudi Arabia's state-owned buying agency said August 7 that it would no longer buy Canadian wheat and barley amidst an escalating diplomatic spit between the two countries.

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"Their actions to stop buying Canadian wheat and barley must be the last nail in the coffin, having a foreign interest in managing such a good thing is wrong and must be undone immediately", according to UCTE chairman Dave Clark.

The Canadian Wheat Board, founded in 1935, was sold by the previous conservative government to Global Grain Group (G3) in 2015, a joint venture of the Saudi Agricultural and Livestock Investment Co. and the American grain company Bunge.

G3 bought 50.1 percent of the board for $ 250 million and gave it a new name to G3 Canada Ltd. The government said the remaining 49.9 percent should be kept for grain farmers, although G3 has the ability to buy back units from farmers. at market value in 2022.

The conservative government said at the time that sales would help modernize the Canadian cereal sector to stimulate investment and create jobs.

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But the union says the Harper government has made a mistake by selling the Canadian Wheat Board to the Saudi company.

"We used to have a fast, efficient and effective way to bring Canadian grain to the market via rail and ports such as Churchill and Thunder Bay, now we have foreign interests that threaten our suppliers and Canadian jobs," Clark said.

The union says it wants to write to Prime Minister Justin Trudeau "to take immediate action to protect Canadian producers by restoring the Canadian Wheat Board for Canadian farmers."

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For its part, the Saudi government has not said whether it intends to sell its stake in G3.

Analysts said the Middle East has imported less wheat from Canada and the United States in recent years as a result of higher shipping costs, while China has become a larger barley buyer.

"There will be plenty of opportunities for Canada to sell barley and wheat elsewhere," said Chuck Penner, an analyst at LeftField Commodity Research, based in Winnipeg.

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According to Statistics Canada, the statistical office of the Canadian government, the total Canadian grain sales to Saudi Arabia amounted to 66,000 tons in 2017 and 68,250 tons in 2016. The Canadian barley sales in 2017 amounted to 132,000 tons.

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But given the tightening of global cereal stocks due to weather problems in Russia, Europe and Australia, Canada might be ready to win more Saudi barley.

"This year could have been a year in which we could have seen some (Canadian) barley trade in October-November," said Jerry Klassen, manager of GAP SA Grains and Products at Winnipeg.

– With files from Reuters and the Canadian press

© 2018 Global News, a division of Corus Entertainment Inc.

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