ETG responds to grower pool bid

28 Oct, 2010 11:26 AM
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ELDERS Toepfer Grain (ETG) has announced plans to offer a pool marketing option following a number of approaches by growers urging the grain marketer to enter this marketing space.

National grain accumulation manager Damian Bradford said the pooling option would provide WA growers who were going to warehouse grain in the CBH system or store predominantly wheat or barley on farm this year, with a different option from daily cash prices.

"It'll provide WA growers with international access to the global footprint," he said.

"We'll be firm on judging our own performance and the pool will provide good grower understanding against other pools and the cash market."

The new pool will provide transparency and simple-to-use options for growers.

"It'll be interesting this year to see what farmers in the west decide to do in terms of marketing," Mr Bradford said.

"We might see a swing towards cash prices given the circumstances but the market will drive it one way or another.

"There's certainly a drought premium in WA and that premium is leaning on the noodle wheat and malt barley grades."

Mr Bradford said WA growers liked traditional marketing methods on the whole.

"We've gone down the path because even in tough seasons like the one being experienced in WA, most growers prefer traditional pooling options in their toolkit," he said.

"The strength in the cash market over the last two to three years has shown growers what competition can do."

ETG managing director Mark Thiele said growers wanted transparency and simplicity beyond the options currently being provided by other pool operators.

"With recent and impending changes to the Australian grains industry landscape, growers are seeking greater alignment with companies they have history with and confidence in," Mr Thiele said.

"ETG through its vast Elders network and Toepfer global network, is well placed to offer a transparent and simple pool to growers," he said.

"ETG will bring to its pooling product the same principle that has seen it so successfully gain strong market share in the cash trading market.

"We pride ourselves on being a marketer that is efficient, eliminates wastage and creates transparent benchmarks."

Returns will be finalised on the whole 2010-11 pooling product before the start of the 2011-12 harvest. Plans to operate pools based on east and west coast marketing that reflect the price and cost issues that are relevant to each specific market will also be finalised.

Mr Thiele said the timing was important to growers because it meant financing costs could be minimised and growers would have the information that enabled them to assess the performance of ETG's pool marketing before committing another season's grain to ETG's next pool.

"The ETG pool product will be uncomplicated with simple payment terms revolving around either a harvest advance product or a flexible loan product," Mr Thiele said.

"We won't run a multitude of intersecting pools and we remain committed to making sure that growers know their pricing benchmarks, so that they can compare our offering with other marketing alternatives such as cash," he said.

Mr Thiele emphasised that a critical feature of the ETG pool operation was informing the grower exactly where they stood at any point in time.

Performance will be the primary benchmark for the EGT pool and the transparency of performance measures and results will be a distinguishing feature.

"In the new de-regulated environment our links to overseas markets through our Toepfer shareholder's global networks of more than 35 offices, means growers can feel comfortable they will have access to critical markets and risk tools to maximize the pool opportunities," Mr Thiele said.

"These returns and any updates will be underwritten to 70 per cent by no later than November 15 and pool updates will be made available monthly as a minimum and more regularly as required.

Growers wanting more information about ETG's pool products should contact national grain accumulation manager Damian Bradford on 0428 319 113.

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