August 2, 2007

CWB to honour barley exports

The Canadian Wheat Board (CWB) is looking for a way to get private barley exports to make sure customers get the grain despite the Federal Court's overturning of government regulation that would have ended CWB's monopoly on the grain.

CWB marketing manager Gord Flaten said he did not yet know how many sales the private grain trade and farmers had booked but trade estimates vary between 300,000 to 750,000 tonnes. The exports were booked as "original options" and could be filled with barley from other countries.

As the contracts area already understood as void, the CWB would work with the exporters to try to accommodate the deals, though he had no details on how that might work.

The CWB sold 2.5 million tonnes of barley worth almost C$400 million ($377.4 million) in the year through July 31, 2006, accounting for about 11 percent of its revenue, which comes largely from wheat sales.

On average, Canada is the world's fourth-largest barley exporter, accounting for 10 percent of world trade, and the second-largest exporter of malt, used to make beer.

However, the CWB will need to determine how it will execute contracts with Canadian maltsters that booked barley sales before a recent run-up in the market, Flaten said.

There is still a gap of about C$50 million between the contract values and current market values, he said.

US$1 = 1.05 Canadian dollar (as of August 2)