Editor’s Note: (August 24, 2018) This story was updated to clarify the influence that Saudi interests have in the Canadian Wheat Board.
A union representing port and transportation workers in Churchill, Man. is calling on the Canadian government to buy back its majority interest in the Canadian Wheat Board, which was sold to G3 Global Grain Group – a partnership between Bunge Canada and a Saudi investment company – in 2015.
The Union of Canadian Transportation Employees said in a press release Thursday that the Saudi government’s decision to stop buying Canadian grain proves that it can’t be trusted to uphold the interests of Canadian farmers. Saudi Arabia’s state wheat-buying agency said Aug. 7 that it would no longer buy Canadian wheat and barley amid an escalating diplomatic spat between the two countries.
“Their actions to stop buying Canadian wheat and barley should be the final nail in the coffin,” said UCTE national president Dave Clark.
Established in 1935, the Canadian Wheat Board was sold by the previous Conservative government to Global Grain Group (G3), a joint venture of the Saudi Agricultural and Livestock Investment Co. and American grain company Bunge, in 2015.
G3 purchased 50.1 per cent of the board for $250 million, and renamed it to G3 Canada Ltd. The government said the remaining 49.9 per cent was to be kept in trust for grain farmers, although G3 has the option to buy back the units from farmers at market value in 2022.
The Conservative government at the time said the sale would help modernize Canada’s grain sector to stimulate investment and create jobs.
WATCH: John Baird attacks Trudeau government during interview on Saudi TV
But the union says the Harper government erred in selling the Canadian Wheat Board to the firm.
The union says it plans to write to Prime Minister Justin Trudeau “to ask for his immediate action to protect Canadian producers by restoring the Canadian Wheat Board to Canadian farmers.”
For its part, the Saudi government hasn’t said whether it plans to sell its stake in G3.
Analysts said the Middle East had been importing less wheat from Canada and the United States in recent years due to higher shipping costs, while China has become a bigger barley buyer.
“There will be plenty of opportunities for Canada to sell barley and wheat elsewhere,” said Chuck Penner, analyst with LeftField Commodity Research, based in Winnipeg.
WATCH: Saudi TV falsely accuses Canada of ‘freedom of opinion’ arrests
According to Statistics Canada, the Canadian government’s statistics agency, total Canadian wheat sales to Saudi Arabia excluding durum were 66,000 tonnes in 2017 and 68,250 tonnes in 2016. Canadian barley sales totaled 132,000 tonnes in 2017.
But given tightening global grain supplies due to weather problems in Russia, Europe and Australia, Canada might have been poised to win more Saudi barley business.
“This year could have been a year where we could have seen some (Canadian) barley trade there in October-November,” said Jerry Klassen, manager at trading house GAP SA Grains and Products in Winnipeg.
— With files from Reuters and the Canadian Press