Grain Export Terminal Shut in U.S. Dispute

Mitsui's United Grain Corp has shut its export terminal at the Port of Vancouver - among the largest on the U.S. West Coast - because the state government withdrew grain inspectors amid an ongoing labor dispute, an export shippers' group said on Friday.

"We've managed to get one ship out this week after getting waivers from the customer and USDA, but that's an exceptional case - and costly," said Pat McCormick, spokesman for export trade group Pacific Northwest Grain Handlers Association, which includes United Grain Corp (UGC), a unit of Japanese trading company Mitsui.

The outbound vessel held 2 million bushels of grain.

The shutdown comes as the United States braces for a bumper grain harvest with prices languishing.

Nearly half of U.S. wheat exports and about a quarter of all grain and oilseed exports exit the country via the Pacific Northwest. The Vancouver facility is one of nine bulk grain terminals in the region.

"We're beginning to hear from customers that aren't going to schedule, with the cloud hanging over whether inspections will be available at a critical time," McCormick said.

UGC was scheduled to load at least 17 million bushels of grain in August, he said.

Millers in Taiwan this week made no purchase in a tender for U.S. milling wheat, due in part to concerns about logistics problems at the terminal, European traders said Friday.

The shutdown at the terminal is the latest development in a 1-1/2-year standoff between UGC and the International Longshore and Warehouse Union (ILWU) over work rules and pay. UGC locked out union workers in February 2013 after the two sides hit an impasse in contract negotiations.

On July 7, state workers stopped inspecting grain for export at the terminal after the government decided to stop providing them with state police protection.

Without the police, inspectors were intimidated by union picketers, said Hector Castro, a spokesman for the Washington State Department of Agriculture, which employs the inspectors.

He said the Pacific Northwest Grain Handlers Association, which also represents Columbia Grain Inc and international trading house Louis Dreyfus Commodities, and the state agriculture department had asked for federal grains inspectors but the U.S. Department of Agriculture declined.

The union and the grain handlers are set to meet next week.

ILWU is also in the midst of separate contract negotiations with a larger group, the Pacific Maritime Association, which represents port employers along the U.S. West Coast.

"The negotiations are separate. One does not depend on the other," said Jennifer Sargent, a spokeswoman for the ILWU.