The 103-year-old organization that co-ordinates shipments through Canada’s two biggest grain-shipping ports is winding down, saying it may not be needed once the Canadian Wheat Board loses its monopoly.
The Winnipeg-based Canadian Ports Clearance Association (CPCA) will cease operations this summer on Aug. 31, one month after the Wheat Board loses control over western Canada’s wheat and barley sales.
The association, which has eight employees, co-ordinates the transfer of western grain from port terminals into vessels, and also sends daily notices to subscribers of ship lineups at Port Metro Vancouver, B.C. and Port of Thunder Bay, Ont.
The role was deemed necessary under the monopoly system because the CWB, while responsible for western wheat and barley sales, does not own grain terminals or vessels. Even so, the organization has its start in 1909, decades before the CWB formed.
The biggest Canadian grain handlers including Viterra, Richardson International and Cargill own much of the grain movement pipeline — from country elevators to port terminals – leaving the CPCA’s role less critical than it may have been during the monopoly era.
"When it’s (direct) sales and I’m buying from you, I don’t know if we need a party in between us to tell me where to put my boat in," said Doug Hilderman, president of the non-profit association, which is controlled by grain shippers and ship owners. "The core function they’ve had is essentially irrelevant now."
In any case, the CWB started arranging shipments directly with vessel owners a couple of years ago anyway, which weakened CPCA’s role, Hilderman said. A CWB spokeswoman declined to comment.
Canada is the biggest exporter of spring wheat, canola, oats and durum, and the vast majority of those volumes that are headed off-shore move through the two ports.
Once the association winds down, the movement of Canadian grain will become less transparent without CPCA’s daily freight reports, Hilderman said, adding that no organization has stepped up to replace that function.
Ultimately, there may be a need to re-create the CPCA, he said, adding he’s disappointed the storied association couldn’t continue.
Agricultural traders and analysts, especially those who do not work directly for grain exporters, may be especially hard-pressed to track export demand for crops and factors that may be influencing cash and futures prices.
"Vessel lineups for Thunder Bay and Vancouver are very important parts of what I do," said Chuck Penner, analyst at LeftField Commodity Research in Winnipeg. "Knowing what’s coming and going helps explain what’s going on in the markets."