Grain shipping slots auction completed

26 Sep, 2014 08:48 AM
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With harvest approaching quickly we weren't confident that this would be resolved in time

ALLOCATION of the State's grain shipping stem for the 2014/15 season is all but done and dusted after CBH's capacity auction finished late yesterday.

About 20 participants, including a handful of new entrants, competed in a blind auction to secure their share of CBH's 14.1 million tonnes of shipping capacity across the State's four port terminals.

Capacity awarded in the auction reached 13,062,000 tonnes, although final figures are subject to review by the Auction Review Committee (ARC) as per normal protocol.

The bulk handler expected the premium average at the end of the auction to be finalised at $27.99 a tonne, with the highest slot premium reaching $40.50/t.

Once approved by the ARC, $365 million in premium funds will be held in an auction pool on behalf of marketers which is rebated based on tonnes shipped at the end of the shipping year.

Before the auction, the CBH Group had withdrawn its proposal to the Australian Competition and Consumer Commission (ACCC) for the proposed allocation of port capacity through Long Term Agreements (LTA) with exporters.

CBH Operations general manager David Capper said CBH was disappointed that a process using LTAs was not supported as a workable solution at this point.

"With harvest approaching quickly we weren't confident that this would be resolved in time to offer capacity for the 2014/15 harvest, so we have withdrawn the LTA proposal at this stage and run an auction," Mr Capper said.

"This is not our ideal situation as we still believe that the LTA system is in the best interests of WA growers.

"Given the situation we are taking more time to consider how that will work into the future."

FarmWeekly

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