By Rod Nickel
WINNIPEG, Manitoba, April 7 (Reuters) – Richardson International, one of Canada’s two largest grain handlers, may raise the price of canola shipments to China to reflect Beijing’s costly higher standard, its chief executive said on Thursday.
The Chinese Embassy in Ottawa said in March that China had delayed to Sept. 1 its new standard for no more than 1 percent of foreign material, such as straw and other plant seeds, per Canadian canola shipment, compared with the current maximum of 2.5 percent.
Such a move would raise seed-cleaning costs for Richardson and other exporters, chief executive Curt Vossen said in an interview at the company’s Winnipeg head office.
“That complication will definitely change the specifications with which you sell,” Vossen said. “If people are willing to pay for added services, you’ll try to find a way to accommodate them.
“What you’re talking about is adding a new element of risk, and the logical thing for a seller to do would be to reflect that risk in the transaction.”
Privately owned Richardson, the largest division of James Richardson & Sons Ltd, is one of Canada’s two biggest grain handlers along with Glencore Plc’s agriculture unit, Viterra Inc.
Glencore said on Wednesday that it agreed to sell 40 percent of its agricultural business to Canada Pension Plan Investment Board (CPPIB) for $2.5 billion, the company’s latest step to cut debt.
The move doesn’t change competition among grain handlers, as CPPIB is simply a financial partner, Vossen said.
