Saudi anger with Canada leaves forage exporter reeling

Jordan Van Hierden says the Canadian government’s spat with Saudi Arabia could cost him millions in lost forage sales.

Green Prairie International, a supplier of forage products based in Lethbridge, has been developing relationships in Saudi Arabia’s livestock market for about five years.

Van Hierden, who manages the company’s equine and feed division for North America and the Middle East, spoke to his Saudi partners this morning. They are wondering what the diplomatic fight between Saudi Arabia and Canada means, long term, for their business plans.

“As a forage market it’s a very important market. It’s the up and coming market,” Van Hierden said. “But we just got slapped in the face by our Canadian government.”

Saudi Arabia is taking steps to suspend economic and diplomatic relations with Canada because of comments from Canada’s ministry of global affairs and minister Chrystia Freeland. In a tweet, the department urged Saudi Arabia to release several women’s rights activists from jail, including Samar Badawi.

In response, Saudi Arabia froze all trade with Canada, including the purchase of Canadian wheat and barley.

Media reports on Wednesday suggested the kingdom was taking more severe steps to cut economic ties with Canada. The Financial Times reported that Saudi central bank and state pension funds ordered overseas asset managers to offload their Canadian equities, bonds and cash holdings “no matter the cost.”

The tweets and Saudi Arabia’s fury over Canada’s intrusion into its affairs will likely have consequences for Green Prairie International.

“From the impressions we get … I don’t think it’s going to blow over that easily,” Van Hierden said. “As of Tuesday, Saudi Arabia started to sell off all of its assets in Canada. Well, you don’t just sell off all your assets if this thing is going to blow over.”

Green Prairie International was planning to export much higher volumes of compressed alfalfa, compressed timothy hay and compressed, de-hydrated corn silage in the near future to Saudi Arabia because the Gulf country will soon be importing all of its forages.

“Saudi Arabia is turning their water off this year for irrigation. And they have (some of) the largest dairies in the world and the largest dairies in the Middle East,” Van Hierden said.

“We’re talking probably a market similar in size to Japan or China, which are the two big importing countries for forages.”

Van Hierden and his business partners in Saudi Arabia are frustrated by the Canadian government’s stance. He doesn’t see the value of Canada “meddling” in Saudi Arabia.

“Some people might say it’s justified, other people might say it’s not justified,” he said. “(But) it leaves an impression with them. The people we work with in Saudi Arabia (said), ‘you guys just had to say something.’ ”

Green Prairie International was planning to participate in a trade mission to Saudi Arabia this fall, but that is likely cancelled.

“Talking to the Alberta government, they say that’s pretty well a no go,” Van Hierden said

On top of forage, wheat and barley exports, the Saudi-Canada battle could have implications for G3, a grain company based in Winnipeg.

In 2015, Saudi Agricultural & Livestock Investment Co. and Bunge acquired a majority stake in the former Canadian Wheat Board to form G3. Over the last three years, G3 has gone on a building spree, building country elevators and investing in export terminals across Canada.

“Regarding the recent announcement from the Kingdom of Saudi Arabia, G3 is continuing with business as usual,” said G3 spokesperson Peter Chura in an email. “G3 is continuing with its ambitious expansion program, building new high-efficiency elevators in Western Canada and G3 Terminal Vancouver, a next-generation grain export terminal on the West Coast.”

Contact robert.arnason@producer.com

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Comments

  • John Wayne

    Sounds like to me Robert Arnason after hearing the news today G3 is for sale. What a perfect time for Justin to buy G3 back and give it to Canadian Western Farmers. He could do the wrong that the past government did through legalized thievery in stealing farmer assets “CWB” and giving those assets to present ownership of G3 (Saudi’s) for free.
    Because the present Canadian government doesn’t know history, Green Prairie International or any other Canadian business directly affected financially should be 100% compensated.

  • John Fefchak

    Diplomacy and supporting human rights; sometimes it’s best to bite your tongue, and especially if you are chastising a country that Canada has dealings with.

    • ed

      Take the low road sort of thing, right!

  • ed

    Maybe the CWB could be put back in place. With prairie terminals and Vancouver export facilities it would be even more prosperous than ever before. The Saudi entity could sell it back to the Western Canadian farmers for any amount of money under the understanding the the farmers would not ever actually have to pay for it as long as they added more investment dollars to the equation and made good use of the assets. Same, same!

  • MorallyCorrect2

    G3 is going to find that it may be a target for retaliation by Canada and will have to pay the price for any damage Saudi Arabia inflicts on Canadian interests.

  • ted

    https://www.nytimes.com/2018/08/13/opinion/canada-saudi-arabia-tweet-mbs.html
    this article in the NY times pretty sums up what an village idiot we have for a Prime Minister

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