By Rod Nickel
WINNIPEG, Manitoba, March 28 (Reuters) – Canada’s Conservative government will not renew its order that the country’s two big railway operators move minimum volumes of grain per week, two ministers said on Saturday.
Mandatory minimum shipments for Canadian National Railway Co. and Canadian Pacific Railway Ltd., were set a year ago to ensure the record 2013 harvest got to market. They expire on Saturday and will not be renewed, Transport Minister Lisa Raitt and Agriculture Minister Gerry Ritz said in a statement.
Canada’s grain export volumes have improved since last year and the crop projected to remain by mid-summer ahead of the next harvest looks about average, they said. But the ministers added that imposing mandatory volumes again is an option if farmers’ incomes, the economy or Canada’s shipping reputation is at stake.
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The requirements were unusual for a government loathe to interfere in markets. But the massive 2013 harvest, followed by severe winter conditions that bogged trains down, caused an unprecedented grain pile-up last year at commercial terminals and on farms.
Canada is the world’s second-largest wheat exporter, and it relies on railways to move crops to ports in British Columbia and Thunder Bay, Ontario, and to North American buyers.
Despite another big harvest last autumn, grain has moved more smoothly this year.
Canada exported 25.4 million tonnes of crops from Aug. 1 through March 22, up 12 percent from a year earlier, according to Canadian Grain Commission data. CN has moved on average 20 percent more grain cars weekly in Western Canada as of March 21, year-over-year, said spokesperson Mark Hallman.
Hallman welcomed the government’s decision and said normal commercial relationships and a stable regulatory environment were important for moving grain.
CP spokesman Martin Cej said the railway would continue to move grain consistent with customer demand.
Grain shippers say timeliness is still a problem, however. The Ag Transport Coalition, representing some farmer and industry groups, said on Wednesday that CN and CP have supplied fewer than half of grain rail cars in the same week they were ordered.
Grain handlers still need Ottawa to ensure railways add capacity necessary to move harvests that are trending larger, said Wade Sobkowich, executive director of Western Grain Elevator Association, whose members include Richardson International and Cargill Ltd.
