September 11, 2012

Will a looming US west coast strike to disrupt grain exports to Asia?

by Eric J. BROOKS

Today (Friday Sept 7, 2012) US Grains Council's Southeast Asia office reported that labour disputes may prevent corn and soy exports from being loaded on west coast ships bound for Asia. According to the USGC's Southeast Asia office flash alert, after negotiations between union and management broke off, "International grain and soybean buyers need to think carefully about their October logistics with the pending potential labour strike looming in the US Pacific northwest [ports]!"

With the contract expiring and a grain shipping port strike possible from September 30th onwards,the USGC warned that under US law," If a ILWU [International Labor Workers Union] strike is called the exporters will quickly declare a NAEGA clause 20 event and delay their shipping obligations."

However, with the union active in six of America's ten west coast export facilities, a strike would not impact all feed crop exports to Asia. Depending on which port a corn, wheat or soy buyer is expecting his shipment from, the USGC advises that, "Buyers need to look closely at their contracts and determine what conditions apply." One thing is for sure, the supply disruption arising from such a strike would bump up international feed grain and oilseed prices, particularly in East Asia.

   
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