THE AUSTRALIAN grain export industry is still feeling its way in terms of getting the grain out of the country, according to a long-term industry analyst.
Ron Storey of Storey Marketing Services said both grain marketers and the bulk handlers were still learning how to manage the process of booking and allocating shipping slots.
"There’s a learning process on both sides - we’ve obviously heard of the problems, but on the other hand, some marketers have said they have had excellent co-operation from the port operators," Mr Storey said.
Mr Storey’s comments came as South Australian Liberal senator Sean Edwards called for nationalised auctions for shipping slots, following exporter dissatisfaction in Western Australia.
Currently, WA-based port operator CBH and South Australia’s Viterra use auction systems, while east-coast based GrainCorp has a "first in, first served" policy to slots.
Mr Storey said while he believed an auction system could work best in fitting in with market demand, there had been problems with the way the auctions were conducted. He also said many marketers were happy with the GrainCorp system.
Chris Aucote, chairman of the Australian Grain Exporters Association (AGEA) and general manager at Bunge Australia, said the AGEA supported the principle behind auctions.
"We are having some teething problems in WA, which is natural, given it is only the second or third year of the system - and last year there was so little grain about in the west that the system wasn’t really tested.
"The auction systems with both CBH and Viterra probably haven’t performed to expectations, but at the end of the day we see auctions as the best way to fairly manage capacity."
Senator Edwards, a member of the Federal Parliamentary Rural Affairs and Transport References Committee, said the auction system in the west was distorting the market right across the country. Exporters were becoming locked in by the high costs of trying to back out of the WA shipping stem, thus reducing demand in other States because exporters were not freely able to change from a WA slot to elsewhere.
"This underlies the importance of having a uniform means of allocating slots around Australia, administered by an independent central organisation with a vibrant secondary market for slots so exporters can easily move grain from one State to another to reduce market distortion.
"When the wheat export market was opened up, it was not the intention to switch from a statutory authority to commercial monopolies in each State: the three sisters, Viterra, CBH and Graincorp."
He argued the point, long made by other marketers but refuted by the Australian Competition and Consumer Commission, that the three bulk handlers engaged in anti-competitive behaviour.
"Not only do they control the shipping stem slots, they charge non-refundable booking fees to other grain exporters.
"Their anti-competitive behaviour is counter to the equitable and efficient access to export grain movement."
Mr Aucote, however, was upbeat about getting a better procedure in place.
"We need to be mindful we’ve had two big crops back-to-back, which will stretch the best of systems, and we’ve also had downgrading which means more segregations and slows things up.
"There’s a tendency to focus on the negative, but overall we’ve moved record volumes. It might not be quite when some want - or out of the ports they want - but it has been moved."
Mr Storey also said exporters needed to get used to the Australian export system.
"There are parties that are used to exporting grain from North America or Argentina, and they wonder why the system is not the same here - but we came from a regulated system and the exporting program is evolving from that."
Mr Storey said changes in the system from year to year, such as those made by CBH this year, showed the port operators were still perfecting the best way to allocate export space.
However, in spite of a clear move towards participating in the entire supply chain, as evidenced by Emerald’s increased move into storage and port operation, Mr Storey does not think there will be a move towards a closed circuit supply chain as some marketers run abroad.
Email a friend