Canada wheat exports dogged by quality complaints

Wed Dec 3, 2014 1:14am EST
 
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By Rod Nickel

WINNIPEG, Manitoba (Reuters) - Buyers of Canadian wheat are increasingly complaining about quality ever since Ottawa changed how its biggest crop is sold and inspected, raising the risk the world's third largest exporter will lose sales to rivals like the United States.

Problems include underweight shipments, lower-than-expected protein content and gluten strength in the wheat, and even the occasional mixture of wheat with other agricultural products.

In October, Singapore-based Prima Group found 850 kilograms of peas in a 25-tonne wheat shipment. A metric tonne is the equivalent of about 2,200 pounds (1,000 kilograms).

"We don't know what's going on in the system here," said Prima advisor Derek Sliworsky in Winnipeg, who said that while not all Canadian wheat shipments suffer from poor quality, "we don't have these problems from other origins." Prima buys between 500,000 and 1 million tonnes of Canadian wheat a year to produce flour at its mills in Singapore, Sri Lanka and China.

Problems have grown since 2012, when Ottawa stripped the Canadian Wheat Board of its centralized role in marketing wheat, said Sliworsky, who used to work for the Wheat Board. The following year, Ottawa cut one-third of the workforce of the Canadian Grain Commission, the agency responsible for quality.

Randy Dennis, the commission's chief grain inspector, also said that since 2012, buyers have increasingly complained about the quality of wheat exports, especially about gluten properties.

Since late 2012, exporters have been able to have cargo certified on the basis of a composite vessel sample or from each incremental 2,000-tonne load. This change was poorly communicated to buyers such as Prima, Sliworsky said. In spring 2014 Prima was shipped wheat from Canada with lower protein than expected, reducing its value by up to $12 per tonne.

As of 2013, government weighing staff no longer monitor vessel loading at the elevator, but review information provided by the grain handler before certifying weight. This year, Prima received a shipment that was 375 tonnes light.   Continued...

 
An ear of wheat is seen on the Canadian prairies near Lethbridge, Alberta, September 7, 2011. REUTERS/Todd Korol