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Port feeling effects of reduced sales of grain.

Port feeling effects of reduced sales of grain

The director of marketing with the Thunder Bay Harbour Commission says the port is being affected by uncertainty in the grain industry.

"I can only predict that the whole grain industry will be in a state of anxiety," said Ken Boschcoff.

He noted that, when the year began, the port had hoped to move 10 million metric tons of grain, compared to last year's seven million tons - the smallest amount in several decades.

"I think we will have to be satisfied with nine million," Boshcoff said in mid-September.

As of Sept. 8 the cumulative total of grain shipments through the port stood at five million metric tons, compared to 3.5 million metric tons during the same period in 1989.

"However, our major concern is with the rest of the season because of the lack of sales worldwide," Boschoff explained.

The demand for grain is so weak that there were even reports that the Canadian Wheat Board had withdrawn from international markets.

The harbour commission received a memo from the wheat board on Sept. 19 stating that it is still looking for markets.

The world glut of grain has been caused by bumper crops in many countries, including the Soviet Union, one of Canada's largest traditional markets.

Although many Canadians don't realize it, the Soviet Union is one of the world's largest producers of wheat, he noted, adding that it produces 10 times more wheat than Canada.

However, Boshcoff explained that the Soviet Union has serious problems in harvesting the grain and getting it to market because of antiquated machinery and a poor transportation system.

It is estimated that 25 per cent of all Soviet grain rots on the ground. Nevertheless, with a large crop the U.S.S.R. needs less Canadian grain.

Thunder Bay has a 2.1 million-metric ton storage capacity in its elevator system.

"If it's not sold, it will certainly strain the elevator capacity even with such large amounts (of storage)," said Boshcoff.

There are normally 1,200 people employed in the grain-handling industry in Thunder Bay. However, in mid-September that number was about 500.

In all there are eight grain-handling companies operating in the city.

The port of Thunder Bay will not be affected this year by the international ban on trade with Iraq, which had been Canada's fourth-largest market for grain.

"Most of the grain had already left (for Iraq)," said Boshcoff.

Grain shipments to Iraq through Thunder Bay have the potential of filling 20 to 25 ships per year.

Boshcoff said activity up until September saw a modest increase in the shipment of most commodities over last year.

Meanwhile, coal was holding its own, while potash shipments were close to the figures recorded last year, he noted.

Coal shipments decreased from 2.4 million metric tons last year to two million metric tons up to Sept. 8.

Kurt Ogris, president of Thunder Bay Terminals Ltd., said the decline in coal shipments was caused by a downturn in the economy. "Less energy is required in Ontario."

Potash also declined from 917,389 metric tons to 826,429 metric tons.

However, Ogris said, "Potash is going to be something like a normal year."

Including dry and liquid bulk and general cargo (including forest products), the overall totals for the port were 8.5 million metric tons to Sept. 8, compared to 7.49 million metric tons during the same period in 1989.
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Title Annotation:Thunder Bay Harbour Commission
Author:Bickford, Paul
Publication:Northern Ontario Business
Date:Oct 1, 1990
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