Auctions start for grain shipping space

25 Sep, 2014 04:00 AM
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PLAYERS in the WA grain space are competing to sure up their share of the State's shipping stem for the 2014/15 harvest period at auction this week.

About 20 participants, including five new entrants, will compete in a blind auction over the next week, for their piece of 14.1 million tonnes of CBH shipping capacity at the State's four port terminals.

The auction, which is run by Tradeslot, started last Wednesday and is expected to conclude by Friday.

Prime front end slots, which fall before June/July, will be the most hotly contended and traditionally fetch significantly higher premiums than back end slots in the later part of next year.

Earlier this year the Australian Competition and Consumer Commission accepted CBH's proposal to replace its port access undertaking, which included the option for CBH to enter into long-term agreements with exporters who used its port services.

If introduced, the agreements would have allowed CBH to offer port access to export customers that were willing to book a minimum of 600,000t of capacity every year on a three-year basis.

At the time, industry feedback supported CBH's goal to provide more certainty and long-term supply security for international grain buyers in a bid to establish markets, compete with forward pricing mechanisms and carry out longer-term contracts with growers, all with the knowledge of guaranteed access to port capacity.

But some players said changes to CBH's port access undertaking could put new industry entrants looking to grow their WA footprint at a disadvantage by limiting their ability to grow market share.

They said the system was inequitable because it favoured existing companies that had a history of export volumes out of WA and made it impossible for a new entrant to gain an equitable share of capacity.

But in a shock move, CBH withdrew its proposal earlier this month, and the port allocation auction system will continue to use the pure market instrument to designate shipping slots on an annual basis.

FarmWeekly

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Penalty Rates on mortgage loans are an imposition upon those who can least afford them, that the
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Still at it eh Paula? Still well paid by the GM industry to promote misleading pro GM
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I'd like to hear from cattle producers regarding this ability to " drill down on individual