A major international grain company that is building a new grain terminal just 350 kilometres south of Vancouver says it plans to handle agricultural products originating from Western Canada.
However, Canadian grain industry officials believe the new facility, built by a consortium led by Bunge North America, won’t attract much business from north of the border.
“It’s hard to say at this point, but we don’t expect to see any significant impact,” said Canadian Wheat Board spokesperson Maureen Fitzhenry.
Lach Coburn, West Coast terminals manager for Cargill, said he doubts the new facility will take grain export business away from the terminals at Vancouver.
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“I haven’t heard anything to indicate there will be a direct competitive threat,” he said, adding he’s not aware of any Canadian grain or grain products being shipped through the U.S. Pacific Northwest (PNW).
Bunge North America recently announced plans to build an eight million tonne capacity grain export terminal at Longview, Washington, just north of Portland, Oregon.
It will be the first grain export terminal built in the United States in more than two decades and is expected to cost more than $200 million.
The facility is scheduled to be operational by the fall of 2011.
Bunge has a 51 percent stake in the project, with Japanese grain and food marketer Itochu holding 29 percent and South Korean agricultural shipper STX Pan Ocean holding 20 percent.
In a news release, a Bunge official referred to Canada as a source of product.
“The facility will be supplied by agricultural production from Washington State as well as other locations in the Northwest, Midwest and Western Canada,” said Bunge Grain vice-president Bailey Ragan.
Asked for more details about the company’s plans for western Canada, communications director Deb Seidel said only that the company plans to ship wheat, corn, soybeans, canola and their products, including meal and dried distillers grain.
Fitzhenry said the presence of a new terminal could introduce more competition into the grain handling business in the region, putting downward pressure on handling and transportation costs.
“That’s what the macro-economics say, but it doesn’t always work out that way,” she said.
She added the CWB has never shipped significant volumes of grain through the U.S. PNW corridor.
Officials from the port of Vancouver could not be reached for comment. Grain and grain products rank with coal and forest products as Vancouver’s major export commodities.
Seidel said Bunge is building the new terminal to meet increasing demand for agricultural products in Pacific Rim countries.
Exports from the PNW are projected to increase by about 13 percent to 35 million tonnes by crop year 2013-14. In addition, China, which is now a net exporter of corn, is expected to become a net importer within the next few years, which will mean more business out of the PNW.
Many companies are delaying large investments because of the recession, but Seidel said this is the time to invest in the long-term competitiveness of North American agriculture.
The new terminal will incorporate all the latest grain handling technology, with a rail loop track unloading system capable of holding four 110-car unit trains at once. It will also have the ability to unload barges from the Columbia River.
