Since Russia has imposed ban on exporting grain the volume of grain shipments by the U.S., and Canadian growers is increasing, the Journal of Commerce reports.
A sudden spike in business came to the St. Lawrence Seaway, and to U.S. and Canadian wheat producers, in sharply increased wheat exports because of Russia's ban on foreign grain sales.
Grain shipments shot up to 830,000 metric tons in August from 647,000 in July, a 28.3 percent increase in one month, and from 550,000 in August last year, a 51 percent hike, the St. Lawrence Seaway administration said Wednesday.
American grain shipments in August rose to 303,000 metric tons, up 62 percent from the 188,000 tons in the month last year. Canadian grain shipments were up 45 percent to 527,000 metric tons from 363,000.
The sudden spike from what had been a slow grain season on the Seaway promises to continue and to provide the prospect "that tonnage will continue on the positive side for the rest of the season," said Richard Corfe, President of Canada's St. Lawrence Seaway Management Corporation.
Grain had been the faltering export in the season so far. Even with the August surge, the Seaway has sent out 3.5 million metric tons of grain year to date, a 9.5 percent decrease from the 3.9 million tons in the first eight months last year.
All other sectors are doing well this season as blast furnaces along the Great Lakes basin resume making steel and power plants demand coal. Iron ore tonnage is up 82.5 percent at 5.9 million metric tons thus far, compared with 3.2 million in last year's period. Coal is up 32.5 percent to 2.1 million tons, other bulk up 5.5 percent to 6.4 million tons. General cargo, which includes steel in finished and semi-finished forms, is up 61.8 percent to 804,000 tons.
Prolonged drought in Russia and slumping grain production prompted a ban from mid-August on the world's third largest grain exports (21.4 million tons in 2009). Even before the announcement, countries were turning to the United States and Canada for wheat and other grains. Although the ban at present is to end on Dec. 31, Russia's ability to export will be constrained for much longer.
The Chamber of Marine Commerce in Canada quotes grain trade officials as saying late last week Germany sought grain from the U.S., "an export they've not purchased from U.S. farmers for three years."
At the Port of Duluth-Superior, trade development director Ron Johnson said: "Grain buyers in Turkey and Egypt, likewise, are sourcing spring wheat from Duluth-Superior." The port was seeing both new customers and larger orders from existing customers. "We also expect to export feed barley to countries we haven't shipped to for 15-20 years," he said.
There were 14 ships at the port loading grain last week for foreign markets.
At the largest Seaway grain port, the Port of Thunder Bay, Ontario, grain shipments rose in August by 15 percent to 485,000 metric tons from August last year, coming out of a bad slump. Year-to-date shipments, to Aug. 31, are still down nearly 600,000 tons compared with the 2009 period.
Shipping lines were reported by the Chamber to have benefited from the sudden shift. Allister Paterson, CEIO of Seaway Marine Transport, a leading Canadian shipping line, said that before the Russian ban "SMT had planned to lay up ships in August and September." But now, "we were able to book enough U.S. wheat cargoes to keep all of our ships sailing." He was bringing another ship out of inactivity to take on 300,000-400,000 tons of American grain cargoes, Paterson said.
Montreal-based Fednav, the largest international marine bulk shipping company in Canada, said there had been a big increase in grain inquiries from Europe and North Africa.