A Chinese consortium is set to break Australia’s Co-operative Bulk Handling’s (CBH) historic stranglehold on grain exports from Western Australia (WA).
The Chinese consortium is negotiating to ship grain grown on local and Chinese-owned farms in WA from Albany to China. It would bypass CBH’s port facilities in a first for bulk grain exports from WA.
The recent $29 million sale of 23,000 ha prime agricultural land in the State’s south-east to the Heilongjiang Feng Agricultural (HFA) Group is understood to be the tip of the iceberg in the move.
The HFA Group is believed to be close to finalizing the purchase of at least three other farms to supply grain for the venture, which would also require grain from locally owned farms to make it viable.
Ships bound for China would be loaded at the existing woodchip facility at Albany harbor by Albany Bulk Handling, a joint venture between Asciano – Australia’s biggest rail freight and ports operator – and Japanese company Itochu, after a major upgrade.
The Gillard Government’s controversial wheat deregulation legislation was passed last week after years of lobbying by the Pastoralists and Graziers Association, opening the door to increased competition among exporters.
“We now have true deregulation in the grain industry in Australia and if someone wants to come in and invest in a supply chain, they can do so and not have to answer to Canberra,” PGA Western Grain Growers chairman John Snooke said yesterday.
“What we are saying to the global grain industry is that we are open for business. We encourage competition in the supply chain because it will lead to lower charges for farmers.”
Rival exporters pay about $18 a ton to use CBH’s port facilities.
CBH acting chief executive officer David Moroney said last week that it had nothing to fear from rival supply chains.
Albany Port Authority chief executive officer Brad Williamson said agricultural and other groups had discussed investing in infrastructure at the port but he had not had direct contact with the HFA Group.
“We are the only bulk products port in the State that isn’t a mining port,” he said. “Most of the others are at capacity but we have spare land and berthing capacity, which means we get all sorts of inquiries,” he said.
International grain exporter Bunge said this year it was interested in investing in Bunbury facilities.
The FHA Group and its lawyers in Perth refused to comment on the farm purchases and export plans.
CHB Group: Founded in 1993, CHB is a grain growers’ cooperative that handles, markets and processes grain from the wheatbelt of Western Australia. The group exports a range of grains to more than 20 markets and is the only major participant in the Australian grain industry owned by growers.
Source: The West Australian Nov 2012