The Canadian Wheat Board expects to ship 35 to 40 percent less grain through Churchill this year, mainly because of reduced wheat supplies.
However, on the positive side, the port has again imported a load of fertilizer from Russia and is being kept busy by a booming Arctic supply business.
Last year the port achieved a 30-year high in grain shipments, handling 640,000 tonnes on behalf of the CWB, the port’s only grain customer in 2007.
The outlook for 2008 is for 400,000 tonnes, which, while down sharply, is in line with the 10-year average.
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“Our goal is still to do more than that, but right now that’s what we’re planning and expecting,” said board spokesperson Maureen Fitzhenry.
The first vessel of the season left Churchill Aug. 4, carrying 46,000 tonnes of red spring wheat to Sudan.
A second vessel was loading 31,000 tonnes of wheat destined for Nigeria last week and four more vessels were slated to arrive before the end of August.
Fitzhenry said the board “pulled out all the stops” last year to maximize movement through the northern Manitoba port to take advantage of spikes in the wheat market.
This year two factors have conspired against the port:
- Churchill relies on grain inventory held over from the previous crop year to get off to a good start when the shipping season opens in late July, but this year carryover stock was a tight 3.9 million tonnes.
- Many foreign grain buyers have delayed making purchases in the hope that wheat prices will fall.
“There’s not a lot of customers keen to make purchases early in the year,” Fitzhenry said.
Bill Drew, executive director of the Churchill Gateway Development Corp., said port officials haven’t given up hope that grain shipments could exceed the current forecast.
“If we have a good, early harvest we could have a good October, and that could help us catch up quite a bit,” he said.
The port is also counting on shipments of non-board grain that might make up for some of the decline in CWB shipments.
Last year no non-boards moved through the port. This year there will be one 25,000 tonne shipment of peas for sure and maybe more depending on how harvest goes.
Drew said it’s difficult for the port to arrange shipments of non-board grain because line elevator companies prefer to ship such commodities through their own port terminals to maximize revenue.
Also, railways don’t offer the same multi-car incentives for Churchill as for other destinations. Canadian Pacific Railway offers no discounts, while Canadian National Railway offers half of its usual rebate.
Last year the port handled its first inbound cargo in recent memory, a load of 10,000 tonnes of bagged ammonium nitrate fertilizer from Russia, brought in by Farmers of North America to be sold at a discount to its members in Western Canada.
Last week another load of fertilizer was brought in, again by FNA and again from Russia. This time it was 8,800 tonnes.
Drew said the unloading went more smoothly, thanks to lessons learned a year ago, adding there is a chance of another shipment before the end of the season.
The vessel that brought in the fertilizer will be loaded with wheat for shipment to the United Kingdom.
The CWB is also working to arrange a shipment of wheat from Churchill to a domestic processor in Nova Scotia on an Arctic supply vessel returning from the northern port. The first-ever such shipment took place last year.
“Nothing has actually been arranged yet because of vessel availability issues, but it’s something that we want to do,” Fitzhenry said.
Drew said that when the numbers are toted up, 2008 won’t be that bad for Churchill.
“We’ll end up with less grain than last year, but we’re extremely busy with increased Arctic supply business and the fertilizer business and we hope more non-board grain,” he said.
