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 Demands for shipping trade risks to be lifted 

Demands for shipping trade risks to be lifted

17 Dec, 2009 02:30 AM
GRAIN giant Viterra has an unfair market advantage, due to its monopoly control of the State's grains supply chain and ports, according to South Australian Farmers Federation grains industry committee chairman Michael Schaefer.

Mr Schaefer, along with other members of the grains committee, made the claim as part of a submission to the Productivity Commission's inquiry into the effectiveness of wheat export marketing arrangements at a hearing in Adelaide this week.

"The risk burden is unfairly distributed in the industry," he said.

"All the reward is taken by Viterra, and all the risk lies with the rest of the trade."

SAFF's submission claimed that an example of the risks to industry from Viterra's market dominance was the current shipping schedules, with nearly 1.4 million tonnes of wheat scheduled for shipping and more than 70 per cent booked for Viterra.

The submission says that the shipping stem is dominated by the bulk handler, which has a $5/t nomination fee.

"If an exporter needs a 50,000t boat, $250,000 has to be paid up-front," it said.

"Any change is considered a new booking nomination. This means the same boat in the same slot requires another $250,000. This fee is not refunded if the boat is not loaded for any reason."

Viterra also made a submission to the inquiry, which said that current regulation of port access arrangements acted as a strong disincentive to new investment.

"Previously other exporters may have contemplated investing in a dedicated supply chain and a port terminal," it said.

"The effect of the port access arrangements means that they would be obliged to provide open access to all exporters, while bearing all the investment risk. New investment under those circumstances is unlikely to occur."

Elders Toepfer Grain is closely monitoring shipping issues in SA, after claiming shipping stems had been closed earlier in the harvest period.

ETG managing director Mark Thiele said his company had not noticed any issues in accumulating grain.

"We've certainly been buying plenty of grain for export, we haven't noticed an issue in being able to accumulate grain to ship," he said.

Mr Thiele said previously there had been issues with closed shipping stems.

Viterra executive manager - grain Dean McQueen said the company continued to work closely with grower and marketer clients, to meet both harvest storage and shipping requirements in the first large season since export markets have been liberalised.

"However, the majority of grain remains in warehouse and marketers are waiting for ownership before committing to shipping," he said.

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Date: Newest first | Oldest first
SAFF Grains past and present leadership undermined the single desk and lobbied against grower ownership and control of their marketing and handling organisations. Now South Australian grain growers are paying the price for their treachery.
Posted by Full Profile, 17/12/2009 5:35:17 AM, on Stock Journal
Now we know why ABB abolished our "A" class shares. They were getting ready to shaft us.
Posted by Will, 17/12/2009 9:28:01 AM, on Stock Journal
Wonder what the rank and file thinks of SAFF grains committee now? Did anyone really think you could sell a monopoly like this to a foreign interest and not have results like this? Welcome to the world of unregulated mayhem in the grains industry.
Posted by mark2, 17/12/2009 4:31:10 PM, on Stock Journal

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