Canada: Barley futures bloom on rumours about monopoly's end
Barley futures at the Winnipeg Commodity Exchange set contract highs on rumours that Ottawa was set to dismantle the Canadian Wheat Board's barley monopoly earlier than Aug. 1, traders said, according to Reuters, June 7.
The government was expected to make the CWB an optional marketing entity for barley sales to maltsters and export markets as early as June 15, some traders said, while others said talk centered around July 1. "The government might be moving a lot sooner than people think on the date," a trader said.
The CWB, one of the world's largest grain sellers, focuses on wheat marketing, but barley sales accounted for about 11 percent of its $3.5 billion in revenue in the year ended July 31, 2006.
The Conservative government's plans to end the monopoly have been contentious, with some farmers looking forward to having the option to sell directly to buyers, and others decrying the loss of the "single desk" they say gives farmers marketing clout.
The CWB has said it may bow out of barley marketing if the government goes ahead with its plans, and has suggested the government could face legal challenges because of the change.
The government was considering a wide range of comments on its draft regulations, said Conrad Bellehumeur, a spokesman for Agriculture Minister Chuck Strahl.
Some industry groups want an earlier monopoly end-date, while some have said the government should postpone it for a year, and yet others have recommended the government stick with Aug. 1 -- the traditional start of the grain marketing year in Canada, Bellehumeur said.
One trader said Strahl was expected to make an announcement about the monopoly on Thursday or Friday, but Bellehumeur would not specify a date.
"The government will be making a decision shortly based on the recommendations by the minister, but we don't have an announcement to make today or tomorrow concerning barley marketing," Bellehumeur said.
The CWB has not been notified about any intention to move forward the date, a spokeswoman said.
New-crop barley futures have surged 13 per cent since May 22, with October barley reaching a contract high of $154.50 per tonne on Thursday and ending $3.30 higher at $154.
The market was also supported by an unconfirmed rumour that a cargo of new-crop barley was sold outside the auspices of the CWB for U.S. $194 per tonne free-on-board Vancouver.
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