Big barely potential in China

31 Aug, 2005 08:45 PM
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TAMMA Grains principal Kim Packer is adamant the Grain Licensing Authority (GLA) bulk export licences he received for 70,000t of malt and feed barley to China are not to Grain Pool of WA (GPWA) clients.

He is also certain the licences are part of bigger things to come for WA growers in developing markets outside WA's single export desk for prescribed grains.

"The opportunities I see for WA grain in China are enormous and the markets we have lined up there are significant," Mr Packer said.

"The markets we have got into China are not GPWA markets and will not affect their day-to-day trading, and never will."

Mr Packer said this was because grain buyers in China did not like dealing with wheat boards or grain pools.

"They like to deal one-on-one," he said.

He said his GLA licence for 35,000t of malt barley to China would be used to make beer, while the other licence for 35,000t of feed barley would produce sugar syrup.

"The tonnages we have put in are miniscule and if we can prove our worth, there is a potential of 700,000t a year," he said.

Mr Packer, who has been accumulating and marketing grain in WA for 18 years, said his business would not have survived without farmers' support.

He said some farmers booked space in his 24,500t storage and handling facility for barley and lupins at Yealering, east of Pingelly.

"We have a very good farmer clientele," he said.

Mr Packer said finding the best markets, providing competitive prices and a good service, paying bills on time and being a WA owned and operated company helped gain farmer support.

"If farmers did not want us, we would not be here," he said.

GPWA, the major bulk export licence holder for WA canola, barley and lupins, claims the GLA licences are directed at GPWA markets instead of new markets, as intended when the GLA was established three years ago.

The GPWA also says the amount of barley licences issued could represent 30pc of this season's barley crop, undermine GPWA's single desk negotiating power in China and further damage viability of the pooling system.

Mr Packer said if he was undermining the pool, the GPWA was doing the same because it had a cash arm.

"If they have a cash arm, why can't we have a cash arm?" he said.

Mr Packer said farmers should have a choice of who they wanted to sell their grain to and saw little value in pools apart from spreading income, with more farmers wanting their money paid upfront to service debt.

He said China paid world parity prices and the only way to gain an edge against competitors was through quality, screening and colour of the grain.

"They do have a liking for Australian barley but are price sensitive," he said.

His storage facilities have been built up over 10 years at a cost of $2.7 million, with further expansion planned.

Stage two would cost $3.7m and increase storage to more than 50,000t, with grading plant, new weigh bridges, sampling facilities and automatic spears included. Peas and pulses have not been ruled out in the future.

"Opportunities will obviously dictate where we go from here," Mr Packer said.

Tamma Grains supplies the domestic market with all types of grain and apart from bulk exports through the GLA, also exports grain in containers, including wheat.

Last year, Mr Packer exported 11,000t of barley in containers to China.

"We are concentrating on barley because we have got the end user lined up outside Grain Pool," Mr Packer said.

"With varieties, we are very particular and target the Hamelin, Baudin and Gardiner varieties."

He said Tamma Grains also supplied barely to eastern states maltser Barrett Burston for Matilda Bay brewery's malt requirements in WA.

Mr Packer runs the grain storage operation while son Scott manages the farm, which produces 4000ha of wheat, barley, lupins and peas.

"We were the people who helped start the concept of the GLA through the Pastoralists and Graziers Association (PGA) in lobbying Ministers," Mr Packer said.

"We are now endeavouring to do that with the Wheat Export Authority."

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