Tight supplies and congested ports are containing container markets for specialty grain.
Special crop exporters say that several factors are tightening container supplies. Prices for container shipping have risen slightly, but shipping product in bags remains competitive in comparison to bulk ocean freight, which has seen dramatic price rises over the past few months and is nearing record highs.
Rick Dobranski of International Grain Trade Inc. of Vancouver and Winnipeg said while shipments to Europe remain on time and reasonably priced, the Mideast, Asia and Africa are not so lucky.
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“A container from Regina to the (European Union) is still only $1,600 US,” he said.
“Not bad, and right now we still have reasonable delivery times. The Mideast and Indian are not so good.”
He blamed the container shortage on several factors: congestion at large container ports in Sri Lanka and southern India; the annual start of the Muslim holiday month Ramadan; early and slightly larger pulse production in Western Canada and American food aid shipments of beans.
As well, a larger portion of the export market is being cleaned and bagged on the Prairies, further increasing demand.
Gary Schweitzer, an exporter from Eston, Sask., said he has had calls from buyers in southern Asia and the Mideast, but added they often lose interest when told he can’t deliver containers of specialty crops ordered in October until February.
“I’m lucky it (India and southern Asian markets) isn’t one of my mainstays … but it becomes more important for me a few months from now when coriander markets come looking,”
Martin Chidwick of Agricore United agrees there is a shortage.
“India-Pakistan container shipping is very, very tight. Those freight rates have been very cheap until now though, so we have some room to move (on price).
“Supply of equipment is the issue.”
John Duvenaud of AJ BAT Inc. of Winnipeg said it is an annual problem, although a bit worse this year.
“Getting good lentils into position, in the kitchen in North Africa from Saskatchewan meant they were shipped in August,” he said.
“There were a lot of containers doing that work over the past two months and they are now on boats on the way back from Tangiers.”
Dobranski said the biggest issue is not the price or supply of containers, but rather what will happen to the product once it is sold.
“Getting cars from the railways is an issue unless we can confirm to them that the cars will get unloaded on time,” he said.
“There is a crop (of oilseeds and cereals) this year and getting room at the port is tough. Then you need to get your containers on board a boat. Will there be demurrage here while we wait? It all slows things up.”
He said rates are up $5 to $15 per tonne for shipping to countries such as Pakistan.
“If you get hit with demurrage of another $15 to $25, it adds up, but when you add the problem of not getting the equipment and month long delays, it gets to be a problem,” Dobranski said.
“Farmers are telling us we’re moving too slow right now, but we’re having troubles accomplishing what we are doing.”
He said it would be worse if exporters were trying to move a big crop.
“Unfortunately, in the end it is the farmer who pays for these problems. We lose market opportunities and prices rise and farmers pay at their gates.”
