Finance

Global appetite for Canadian commodities remains insatiable with Vancouver port handling record volumes in first half

Demand for grains pushed cargo volumes up seven per cent overall from the start of 2021 to the end of June

Article content

Cargo volumes hit a record high in the first half of the year at Canada’s largest port, reflecting the global surge in demand for commodities.

Advertisement

Article content

Strengthened international demand for commodities such as barley and other Canadian grains pushed cargo volumes at the Port of Vancouver up seven per cent overall from the start of 2021 to the end of June compared to the same period last year, the Vancouver Fraser Port Authority reported in its mid-year report released Thursday.

“If you look at the numbers that we’re seeing even during a pandemic, … (it shows) the ports are an economic powerhouse in Canada,” Robin Sylvester, president and chief executive at the Vancouver Fraser Port Authority, said in an interview.

The record volumes of cargo passing through Canada’s largest and North America’s third largest port reflect the unique dynamics happening in global supply and demand. Consumer demand in the first half of the year largely concentrated around goods as COVID-19 containment measures quelled discretionary spending on items such as travel and services. That in turn kickstarted global manufacturers to ramp up production and ship out products and raw materials that quickly jammed up supply chains and filled up ports. Ports around the world including North America have been reporting logjams, while the cost to haul a 40-foot steel box from China to Europe has jumped 500 per cent compared to a year earlier, according to a Bloomberg report.

Advertisement

Article content

Canada’s trade balance has been firmly in the black for much of the year.

“That marks five of seven months so far in 2021 in the black, the best run since 2014,” according to Benjamin Reitzes, economist at BMO Capital Markets. Exports have been driven by the auto and energy sector.

The Vancouver Port reported that Canadian grains saw some of the highest level of activities at the port from January to the end of June, with barley cargo volumes increasing 151 per cent from the same time last year, likely driven by demand from China. Meanwhile, wheat and animal feed grew 23 per cent and 30 per cent, respectively. Canola, on the other hand, inched up only 0.3 per cent. Overall, cargo volumes rose 7 per cent to 76.4 million metric tonnes in the first half of the year, compared to the same period in 2020 — and five per cent above the previous record set in 2019.

The number of containers in the port also surpassed records set out in 2019 and last year, growing 24 per cent. “It really comes down to … we have more things that we want to consume being brought in containers and medium-term forecasts for containers is two to three per cent growth,” Sylvester said.

While the growth is promising, the capacity at the port concerns Sylvester, who said between 2025 and 2030, there may not be enough space at the port to accommodate for the expected volume surge in the coming years.

Advertisement

Article content

Currently the port authority is overseeing the completion of an expansion project that would make additional room for 600,000 containers, but it’s also trying to get approval for another terminal expansion that would expand capacity a further 2.4 million containers.

“It’s frustrating that we can look five years out and say we’re going to be short on capacity,” Sylvester said, adding the port expects to see issues of congestion and export prices increasing. “Unfortunately, those are the kind of symptoms we expect to be seeing in the last half of this decade until we have terminal two ready.”

Financial Post

• Email: [email protected] | Twitter: 

_____________________________________________________________

 If you liked this story, sign up for more in the FP Economy newsletter.

_____________________________________________________________

Advertisement

In-depth reporting on the innovation economy from The Logic, brought to you in partnership with the Financial Post.

    Comments

    Postmedia is committed to maintaining a lively but civil forum for discussion and encourage all readers to share their views on our articles. Comments may take up to an hour for moderation before appearing on the site. We ask you to keep your comments relevant and respectful. We have enabled email notifications—you will now receive an email if you receive a reply to your comment, there is an update to a comment thread you follow or if a user you follow comments. Visit our Community Guidelines for more information and details on how to adjust your email settings.



    Most Related Links :
    nativenewspost Governmental News Finance News

    Source link

    Back to top button