Bulk grain industry stakeholders are optimistic about 2020-21 production, although some have noted concern over the capacity of Australia’s supply-chain infrastructure to manage the increase, according to a new report released by the Australian Competition and Consumer Commission (ACCC) on 19 March.
“East coast stakeholders expressed optimism about large harvest volumes and the prospect of a substantial exportable surplus from South Australia, Victoria and New South Wales in the new season. Most stakeholders considered that market price signals are likely to revert to conditions in typical years – with sufficient grain available on the east coast to supply domestic markets without the need for coastal shipments or substantial inland grain movements,” the report says.
The 2019-20 year saw Australia’s lowest bulk grain exports since 2011-12 and its lowest bulk grain production since 2007-08, owing to prolonged drought conditions, according to the report. However, the Australian Bureau of Agriculture and Resource Economics and Sciences (ABARES) December forecast for winter crop production predicts the second highest tonnage on record.
The report states that stakeholders noted heavy bookings for the new season in shipping across most regions. While no specific problems were highlighted regarding access to capacity, some stakeholders worry about the impact it could have on supply chains.
“Some stakeholders expressed concerns regarding likely stress placed on inland infrastructure and bulk handling facilities, with a particular emphasis on access to sufficient labour, and cross-border movements,” the report says.
“The ACCC considers that the larger grain harvest and significant exportable surplus developing in the 2020-21 season will provide a significant test of access arrangements for port terminal services.”
The ACCC report welcomes the support of the Federal Government for 11 recommended changes to the Wheat Port Access Code of Conduct.
“The supported recommendations will benefit industry by providing clear obligations and reduced regulatory burden for port terminal service providers, fair access for exporters, and a competitive market for growers,” the report says.
However, it notes the importance of expanding the Code’s coverage from wheat to all bulk export grains. “The Code’s coverage should be expanded from wheat to all bulk export grains at port to ensure that exporters of all bulk grains (including pulses and oilseeds) have fair and transparent access to port terminal services.”
To read full report, click here.