War in the Middle East has dramatically increased the cost of exporting grain to countries anywhere near that region.
In addition to the rising cost of fuel, shipping lines have implemented a war tax due to the risk of exporting commodities to the region.
"There's no other way to put it," said Ken McDougall with McDougall Acres Grainex based near Moose Jaw, which export Canadian chickpeas to Europe, Pakistan, Lebanon, South Korea, and Israel.
" The tax is higher to certain regions. Like, of course, it's very high to Israel, it's very high to Lebanon. We don't ship to Iran or Iraq, but Pakistan has a war tax." he said.
McDougall said it cuts directly into their margin and affects what they will sell to the region moving forward.
" So we're focusing more into the European business that we already have. That has created some opportunities, which is great, but we also hate to lose some of the opportunities into these other regions that are considered more safe with the offset of what is going to be the cost per ton for our company." he said.
The current cost to ship to Pakistan is $500 USD per container, he noted.
"So in my mind, that is a very significant cost. If we wanted to ship to Israel or Lebanon, it's significantly higher than that, and we won't.”
McDougall also said extra costs are limiting the prices that can be paid to producers for both old crop and new crop.
