A diplomatic row between Canada and the Kingdom of Saudi Arabia appeared to worsen on Wednesday as Saudi officials announced that they plan to sell their assets in Canada, stop buying Canadian wheat and barley, and cancel all airline flights between the two countries.
It was the latest escalation in a diplomatic dispute that began last weekend when Canadian government officials called for the release of two imprisoned women’s rights activists. Saudi officials have called on Canadian Prime Minister Justin Trudeau to apologize on behalf of Canada for the remarks. But nobody in the Canadian government has apologized.
Saudi Arabia's main state wheat buying agency told grains exporters on Wednesday that it will no longer buy Canadian wheat and barley.
"As of Tuesday, Aug. 7, 2018, Saudi Grains Organization (SAGO) can no longer accept milling wheat or feed barley cargoes of Canadian origin to be supplied," reads a notice sent to grain traders.
Canada sold 66,000 tonnes of wheat to Saudi Arabia last year, slightly less than it did in 2016, Statistics Canada data shows. In 2017, Canada also sold 132,000 tonnes of barley to the country, two times as much as it did the previous year.
In 2015, Saudia Arabia-based Saudi Agricultural and Livestock Investment Company was part of a consortium that bought a controlling interest in the Canadian Wheat Board for $250 million.
The move to block Canadian grain is the Kingdom's latest attempt to punish Canada economically after Global Affairs Canada publicly criticized the Saudi Arabia for jailing dissidents, enraging the regime.
The national Saudi Arabian airline, Saudia, said this week that it would suspend all flights between the country and Canada starting next week. The airline flies two routes to Canada, one to Riyadh and one to Jeddah.
But the Saudis don't have a lot of economic weapons at their disposal. The Financial Times newspaper reported Wednesday that the regime has ordered its central bank and massive sovereign wealth fund to sell off any Canadian assets, which the newspaper estimated to be a “fairly small” fraction of its total $100 billion in foreign holdings.
The Canadian dollar plunged on the latest news reports, before traders realized the limited scope of the moves and the loonie rebounded in trading.
