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Credit crunch’s impact on crops varies

There’s been lit-tle to no impact on Canada’s grain and oilseed exports from global credit issues so far – but there has been some slowdown reported in the pulse and special crops sector.

“I don’t know if the credit issues are widespread and have significantly impacted Canada’s exports of grains, oilseeds or pulses, but there is no question that the parameters of how lending agencies evaluate credit worthiness has changed,” said Mike Jubinville, a Winnipeg-based analyst with the farmer advisory service ProFarmer Canada.

Lending agencies have definitely become more stringent, he said. “However, to define what that means to the companies buying the Canadian crops is very difficult.”

“Based on the whole scope of everything from financing to shipments, I have heard various stories of people having their line of credit reduced,” said Rob Tisdale with Orion Agriculture Consultants in Winnipeg.

“Through no fault of their own, the banks are telling these companies that they have a lot less operable cash to work with.”

This started in the Middle East and Turkey and has slowly moved from country to country, he said, and the impact of lower credit lines has been felt on cargoes all the way down to containers which carry pulses and special crops.

“A lot of the credit issues are being worked through, but it has been hell on wheels in the meantime for both shippers and receivers,” Tisdale said.

The sellers have had the added pressure of having to deal with the devaluation of their products and the buyers who cancel previously made purchases for the now-lower-priced products, he said.

The credit crisis has been the core problem for Canadian crops, followed by the devaluation of the product, Tisdale said.

Maureen Fitzhenry, media manager for the Canadian Wheat Board, would not comment on whether credit issues have been affecting wheat and barley sales, pointing out such details were commercially sensitive.

Lach Coburn, shipping manager for Cargill Ltd., said his company has had no disruptions to its grain or oilseed shipments from any customers due to credit issues.

“The only blip I heard was in some peas to India, but since we were not involved in that deal, I don’t have any details to provide,” he said.

The media and some companies have been “playing up” the credit issue beyond what has actually been happening, Coburn said.

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