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Credit crunch’s impact varies on Canada’s crops

(Resource News International) — There has been little to no impact on
Canada’s grain and oilseed exports from global credit issues so
far, but there has been some slowdown in the pulse and special
crop sector, according to industry participants.

“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,”
he said.

This started in the Middle East and Turkey and has
slowly moved from country to country, he said.

The impact of lower credit lines has been felt on cargoes
all the way down to containers which carry pulses and special
crops, Tisdale said.

“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 lower-priced products, he said.

“These buyers want out of the higher-priced contracts and
want the cheaper prices,” he said.

“The credit crisis has been the core problem for Canadian
crops and the devaluation of the product second,” Tisdale said.

Maureen Fitzhenry, media manager for the Canadian Wheat
Board, would not comment on whether credit issues were having any
kind of effect on wheat and barley sales, pointing out that those
kind of details were commercially sensitive.

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