Grain exports flow fast as pandemic lockdowns clear rail capacity

Traffic accelerates on lower coal, crude volumes

Winnipeg | Reuters — Canadian grain exporters are boosting sales in a slumping global economy, as demand for commodities like oil weakens and frees up railway space.

Brisk crop movement in a country that relies heavily on rail is a bright spot during pandemic lockdowns, which have hammered most industries.

“We’ve had an almost unlimited supply of rail cars and power. We’re shipping off the map,” said John Heimbecker, chief executive of grain handler Parrish and Heimbecker.

Canada exported a record 959,900 tonnes of wheat in the week ended May 10, although year-to-date volumes from Aug. 1 are behind. Canola exports are eight per cent ahead of the year-ago pace.

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Major exporters include Richardson International, Viterra and Cargill.

In the 2019-20 crop year to date, shippers have unloaded more than 19 million tonnes of grain at Vancouver, up six per cent from average, despite a disruptive rail strike and protests earlier, according to Quorum Corp.

Declining coal and crude volumes and Canadian National Railway’s recent purchases of locomotives and hopper cars have driven up grain shipments, said Sean Finn, CN’s executive vice-president of corporate services.

“We’ve been shipping grain like there’s no tomorrow,” he said.

Timely rail service is critical for farmers’ cash flow, said Bill Campbell, president of Keystone Agricultural Producers.

“It has been a pleasant surprise for producers to haul all their commodities when they want to.”

A tougher test will come in autumn and winter, when a new harvest is ready and as other sectors may recover, said Wade Sobkowich, executive director of the Western Grain Elevator Association.

By then, Canadian Pacific Railway will be running additional high-volume grain trains to handle another big potential harvest, as part of its long-term upgrades, said Joan Hardy, CP’s vice-president of grain and fertilizer sales.

“There’s a great crop in the ground and our customers are telling us conditions look really good,” Hardy said.

— Rod Nickel is a Reuters correspondent covering the agriculture and mining sectors from Winnipeg.

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