Views differ over grains

27 Jul, 2005 08:45 PM
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THERE were conflicting views at the GrainsWest Expo about whether the state's grain export marketing arrangements for prescribed grains such as barley, canola and lupins were conducive to investment in the WA grains industry.

While Agriculture Department director general Ian Longson pointed to past and present value adding initiatives in WA, Louis Dreyfus Australia trading manager Alick Osborne said more value adding was happening in less regulated environments.

Mr Longson said that with the increase in grain produced by non-traditional exporters it was desirable that WA should aim for the best quality grain and value add where possible.

He said the State Government was keen to help with value adding opportunities.

Mr Longson said past value adding achievements were the development of udon noodle wheat and Shoshu barley for Japan while the Japanese-owned Nagata starch and gluten plant at Henderson, was due to start processing soon.

"We would like to see more of this," he said.

Efforts were also underway to value add lupins with Co-operative Bulk Handling (CBH) and George Weston Foods in the process of building a $10 million lupin de-hulling plant in WA.

Lupins are high in protein and low in cholesterol and can be used as a substitute for egg whites, aquaculture feed or converted into lupin dairy milk.

"We believe if we can attract interest in either one of these areas we can see lupins becoming a high value crop for WA grain growers in the next three years," Mr Longson said.

He said the WA domestic grain market was small but had good quality grain with low moisture and that the question now was where to from here.

"The emphasis must lie in producing high value grains and hopefully add value to them on shore in WA," he said.

The Grains Research and Development Corporation (GRDC) estimated Australian grains productivity averaged 3.5pc a year over the past decade and in WA that figure was 4.2pc, with research and development accounting for half those gains.

Mr Osborne said eastern Australian markets were becoming increasingly deregulated and after October 1 all NSW barley, sorghum and canola could be exported freely.

He said the domestic demand for grain in eastern Australia was 6.5mt of feed grain in barley, wheat and sorghum and more than 2mt milling wheat consumption.

Combined with exports it allowed room for Louis Dreyfus to expand its business in eastern Australia.

"When you compare that to WA the opportunity for companies, particular those with an interest in core expertise in export marketing is relatively limited," Mr Osborne said.

He said if the company received a 50,000t Grain Licencing Authority export licence it would need to employ at least one staff member which could not be done for less than $50,000 a year.

"So there is a dollar a tonne straight off the bat.

"If you only end up putting out a cargo of 25,000t then your costs have blown out to $2/t.

"So being able to access the market on competitive terms is important to companies looking to invest in different parts of the world."

Mr Osborne said companies were investing in other markets such as Argentina, Brazil and the Black Sea where they could access the marketplace with less control quality types of regulation which provided better returns than in Australia.

He said it was interesting that the average world cereal productivity growth was about 2pc and much greater in oilseeds at about 4pc.

Meanwhile Australian cereal productivity growth had been much higher but less in oilseeds, which posed questions about Australia's grain research priorities.

"It is obviously something our competitors are doing in terms of oilseed production around the world, predominately soybeans I guess, that is different to what is happening in Australia and where all the money is being invested," Mr Osborne said.

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