WINNIPEG – Canola growers in Saskatchewan and Manitoba say they’re not happy with a “no admission, no denial” payment made by XCAN Grain Pool to the Winnipeg Commodity Exchange.
“It doesn’t sit well with our membership … when someone admits there’s no admission, no denial, no wrongdoing, no perceived wrongdoing, and a quarter of a million dollars changes hands,” said Bill Hetland, president of the Sask-atchewan Canola Growers Association.”There’s got to be something out of whack there.”
Reason for payment
The payment of $250,000 was made as a resolution to an investigation into the way the company, as the major long-position holder, traded the June 1994 canola contract. The exchange is still investigating the major short-position holders in the contract.
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Producers are hoping changes to the canola contract will prevent a repeat of what happened last June, when the exchange declared a market emergency and forced early liquidation of the contract.
Details of those changes are expected to be announced by the end of the month. Changes may include a shift from the current warehouse receipt system to a warrant system, and moving the pricing point inland from Vancouver.
But Hetland said the exchange should also consider changing the way it polices itself.
For example, Canadian Grain Commission representatives and producers could sit on the business conduct committee as “an independent set of ears.” The committee, made up of exchange members, is the most senior disciplinary body of the exchange.
“People are going to trade this contract if they’ve got confidence and they know that there’s integrity behind that,” Hetland said. “That will cause … more liquidity in the market, and that’s what makes it run.”
Lowered perception
Bruce Dalgarno, president of the Manitoba Canola Growers Association, said the resolution and subsequent payment did nothing to improve public perception of the exchange.
“It gets a little disconcerting when they’re supposed to be policing themselves and you end up with … the kind of gift that XCAN is giving them. It makes you wonder,” Dalgarno said.
Hetland said producers support the exchange and the open market, and simply want to offer some “constructive criticism” to the exchange.
