Japan ramps up U.S., June Canada wheat buys to offset delays

Tokyo | Reuters — Japan ramped up its purchases of U.S. grains and June-arrival Canadian wheat used for making bread and noodles, in a tender awarded on Thursday, in a move to offset the possibility of extended shipping delays from Canada.

Canada’s record canola and wheat harvests have clogged its rail arteries and overwhelmed its ports, delaying shipments and creating logistical bottlenecks threatening to last at least into spring.

Japan’s ministry of agriculture bought 50,310 tonnes of hard red winter and 82,454 tonnes of dark northern spring grades from the United States, as well as 99,522 tonnes of late June-arrival Canada Western Red Spring (CWRS) wheat.

Japan typically buys about 20,000-30,000 tonnes each of the five grades of food quality wheat from the U.S., Canada and Australia in tenders typically issued three times a month.

“There were worries if shipments from Canada will be able to arrive or not, so we were asked (by millers) to take additional supply from the U.S.,” a farm ministry official said.

Tokyo-based grain industry sources said wheat shipments to Japan from Canada are currently delayed by about a month.

“The problem is (Canada) has too much crop and no outlets, so shipments have been slow,” one of the sources said.

The bumper crop has overwhelmed Canadian National Railway and Canadian Pacific Railway (CN, CP), resulting in a combined backlog of some 40,000 grain hopper cars. [Related story]

Japan bought a total of 284,161 tonnes of food-quality wheat in the regular tender or nearly all of the 312,816 tonnes it tendered for on Tuesday.

The official said the ministry’s 28,655 tonnes of CWRS it failed to buy would likely be rolled into a future tender, but was unsure when that would be since next Tuesday, when the tender is normally issued, is a national holiday in Japan.

Mostly likely it would be in a day-delayed tender next Wednesday, he said, adding nothing had been formally decided.

Japan keeps a tight grip on imports of the country’s second-most important staple after rice and buys the majority of the grain for milling via the tenders.

— Reporting for Reuters by James Topham in Tokyo.

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