Disputes arise from ignorance on grading changes

Canadian grain quality standards haven’t changed, but a new type of grading might be surprising buyers who aren’t aware of the changes, the Canadian Grain Commission acknowledges.

“I’m not sure that all of the countries are fully aware of the difference between composite and incremental (grading), so I think there’s some education that needs to be done there,” said Daryl Beswitherick, the commission’s program manager for quality assurance.

Until late 2012, Canadian grain loaded onto ocean vessels was checked and graded every 2,000 tonnes. This is known as incremental grading.

However, buyers and sellers can now choose whether they want to continue doing that or switch to composite grading, in which 2,000 tonne increments don’t have to meet the grading standard, as long as earlier or later increments in the same vessel compensate for that and bring the average back to the grade standard.

That’s where there might be communication problems between the people who negotiate contracts and those who receive the grain.

Derek Sliworsky of Singapore’s Prima Group recently highlighted such a problem during the Cereals North America conference. He said millers at his company were surprised when a Canadian grain shipment’s specifications varied between holds in the vessel, which forced them to adjust their processing.

Beswitherick said composite grading can be attractive to some buyers and sellers because it removes the danger of having to offload some parts of a shipment if they are not exactly to grade or having to certify that particular part of a load as a different grade. Both of those can be expensive and difficult to do.

Beswitherick said guaranteed specifications in export shipments should not be any different than three years ago.

“What was a No. 1 Canada Western Red Spring with the wheat board is still a No. 1 without the wheat board,” said Beswitherick.


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