Aims to bridge Prairies with the Asia Pacific . . .
Canadian crop trader, G3 Global Holdings, opened a new high-speed grain-export terminal in North Vancouver last week to compete in the export of grains to Asia. This is the first new Vancouver-area grain terminal since the 1960s. It will reportedly be faster than other terminals at unloading trains, and is intended to be a key link between Canada’s Prairies and markets in China and Indonesia. Exports from the West Coast have been historically strong, and G3 has signaled a focus on wheat and canola as “two prime commodities” for export to Asia.
Wheat and canola trade important to both sides of the Pacific . . .
In 2019, 20 per cent of Canada’s wheat exports went to Indonesia and China, worth a combined C$1.1 billion; 19 per cent of Canada’s canola exports went to China, worth C$800 million. Canada is also the source of 55 and 87 per cent of China’s wheat and canola imports, respectively. But after Beijing revoked the licenses in March 2019 of two large Canadian exporters, canola exports to China in 2019 shrunk by C$2.0 billion compared to 2018. This trade dispute was later compounded by bad weather that hurt harvests in Canada, the world’s biggest canola-growing country.
Optimistic trade trends to come . . .
While there were optimistic signs that China would normalize canola trade earlier this year, those moves have yet to materialize. However, China has continued to accept other exporters’ shipments from Canada, including G3. The G3 terminal may offer some respite, as its dock can take in Capesize ships – the largest bulk cargo carrier ships. Other markets with growing demand in the Asia Pacific could also offset China’s moves: Indonesia, Japan, Bangladesh, Pakistan, and Australia rank high as destinations for Canadian wheat or canola, while other grains are seeing rising demand, such as new Chinese demand for Canadian barley.