July 13, 2012 / 10:40 AM / 5 years ago

Canada's wheat market holds promise for niche traders

GENEVA (Reuters) - Swiss-based agricultural trader Quadra Commodities said it aims to boost volumes by nearly half in the next year and plans to expand in the Canadian wheat export market after liberalization next month, its Chief Financial Officer said.

Quadra, a Geneva-based firm launched in 2010 by traders from the Australian Wheat Board (AWB), said it expects to compete with big traders by using its knowledge of market liberalization and ties to U.S.-based commodities merchant Lansing Trade Group.

AWB had a monopoly on exports until it was liberalized in 2010.

"The liberalized system in Australia and deregulation in Canada present opportunities to acquire...contracts. We already have the know-how with Australia and we think Canada will be very similar," said CFO Robert Petritsch.

"There will be consolidation in the market but the bigger they get the less flexible they will be. So as the dinosaurs get bigger, there is room for the small ones," he added.

Top global commodity traders are expected to muscle into the Canadian market when the world's top exporter ends a seven-decade monopoly on August 1.

Glencore (GLEN.L) is waiting for the Canadian government's approval of its C$6.1 billion takeover of the country's biggest grain handler Viterra Inc VT.TO.

Petritsch added that the expansion of shareholder commodities merchant Lansing Trade Group in Canada via a new joint venture with Olam International will probably help Quadra gain a foothold.

Macquarie Bank is also a Quadra shareholder.

Quadra trades about 3.5 million tonnes of soft commodities each year like grains, sugar and soybeans and expects to increase that to 5 million tonnes by 2013. It typically buys wheat and corn from markets like Australia and North America and sells them to buyers in the Middle East and Asia.

Petritsch also said that the company hopes to grow by acquiring its own fleet of tankers.

Ship values have slumped because of overcapacity due to brisk ordering during the boom years.

"Right now we are looking at shipping assets. There's a lot of distressed ships and we believe there is a potential for these assets to appreciate," he said.

Editing by Stephen Powell

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