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Saudi Arabia’s direct ownership of Canadian companies is relatively limited, but three years ago the Kingdom bought an agricultural icon.

In 2015, the state-owned Saudi Agricultural and Livestock Investment Co. (SALIC) invested $250-million in the Canadian Wheat Board through a company called G3 Global Grain Group, a partnership with U.S. agriculture company Bunge Ltd. The Saudis quickly increased their stake in the partnership that owns the grain company, now called G3 Canada Ltd., to 75 per cent, with Bunge holding the remainder.

The Saudi government instructed overseas asset managers to sell off Canadian equities, bonds and cash holdings, the Financial Times reported on Wednesday, citing unnamed sources. It’s unclear whether a major private investment such as SALIC’s G3 stake would be a target of the Saudi move. Representatives from G3 could not be reached for comment on Wednesday.

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Brett Malkoske, G3’s vice-president of business development, said on Tuesday it was “business as usual” at the Winnipeg-based grain company, and there are no changes to the company’s business. “Obviously, it’s a developing story but we continue to do what we do.” Mr. Malkoske said the company is “independent” and sells to markets around the world.

The Saudi agricultural fund and Bunge did not respond to interview requests.

The federal government revoked the wheat board’s monopoly on Western wheat and barley in 2012, allowing such major grain companies as Richardson International, Viterra Inc. and Cargill Ltd. to compete for farmer’s crops.

The Saudi investment in the wheat board was seen as strategic for a desert Kingdom that relies on imports for most of its food supply and has banned the sowing of crops that require irrigation.

“They are very conscious of food security. I think this was a strategic investment to buy into the Canadian grain handling system,” said Jeff Nielsen, a farmer in Olds, Alta., and president of the Grain Growers of Canada.

G3 has since built a network of grain elevators and terminals, and is poised to open a new facility in the Port of Vancouver, a gateway to Asian buyers. Grain ships sailing the Great Lakes bear its name and carry Canadian crops down the St. Lawrence River for transfer to ocean-going freighters bound for Europe and Africa.

Grain companies do not name their buyers, but Canadian and Saudi government data show Saudi Arabia is rarely among those destinations.

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Saudi Arabia purchased 66,000 tonnes of Canadian wheat in 2017, enough to fill one Panamax-sized freighter. Barley sales were 132,000 tonnes. Between January and May of 2018, no Canadian field crops made their way to Saudi Arabia, according to Statistics Canada, which covers all Canadian sources. By comparison, Canada exported a total of 14.7 million tonnes of wheat and 1.3 million tonnes of barley in 2017, government data show.

Mr. Nielsen said Saudi Arabia used to be a significant buyer of barley as camel feed, but purchases of Canadian wheat and barley have plunged as the Black Sea region has boosted its harvests. “Feed grain is a lot closer to home and a lot cheaper,” he said.

G3 has become an “essential” grain buyer in parts of Western Canada, and the company’s construction of large, efficient terminals are important in boosting the efficiency of the grain supply chain, Mr. Nielsen said, adding Saudis’ quest for food supplies means “they will be back into the Canadian market at some point in time.”

In 2018, Saudi wheat purchases are expected to reach 3.5 million tonnes. The state-owned grain buyer, Saudi Grains Organization, recently said it is sourcing its third wheat tender of the year from five companies: Archer Daniels Midland Co., Glencore Agriculture BV, Cargill International, Kufco of Switzerland and Aacorudu of Lithuania.

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