Chinatex steps up buying

13 Dec, 2013 01:00 AM
Comments
14
 
This year we have bids at GrainCorp, Emerald and GrainFlow sites

FARMERS have noted with interest the presence of a strong new bidder entering the grains sector.

Chinatex has been accumulating grain out of Australia for some years, but this is its first year offering prices at a large number of sites.

It is a name familiar to those in the wool industry, having a long history as a wool buyer, and currently ranking around the third largest buyer of wool.

In the grains sector it has previously been involved as a buyer of oilseeds, but is now ramping up its cereal purchasing program.

Company purchasing manager in Australia Edmund De Bono said Chinatex had previously bought primarily off the trade in Australia, before offering prices at select sites last year.

“This year we have bids at GrainCorp, Emerald and GrainFlow sites, previously we only offered prices at a couple of sites including Nullawil and Lakaput in Victoria and Griffith in NSW,” he said.

Mr De Bono said the company was primarily acquiring grain out of south-eastern Australia this year, due to the difficulties with the harvest in northern NSW and Queensland.

“All the grain goes back to China, previously it has been all in containers, but this year we are also looking at doing some bulk shipments.”

Chinatex is a serious player in the oilseed sector. Mr De Bono said it had an annual crush of up to three million tonnes of oilseeds, or more than the entire size of the Australian canola crop based on a five year average.

Along with that, the company has also been busy buying ASW wheat in particular and both malt and feed barley.

AgFarm account manager Fabian Devereux said it was good to see another active participant in the market.

“It is good to see competition for our grain.”

He said there had been a lot of inquiry surrounding Chinatex, as a new participant in many areas, this year.

“We just say the same as with all sales, it's unwise to do everything with one company, it's great to see someone else in the market, but don’t put all your eggs in one basket.”

Mr De Bono said Chinatex, due to its ties with the Chinese government as a subsidiary of a state-owned enterprise, did not present a counter-party risk for growers.

A speedy payment program earlier in the year created headaches for the company later on when it slowed up.

“We were paying in two or three days, and then logistically it became too hard, as we were buying from new sites, and new growers, so there was all the registration and paperwork required, so it slowed up a bit," Mr De Bono said.

“I had growers ring up and ask whether they were going to be paid, there’s definitely no problems it is just getting things set up, the payment time has blown out a little, but it is still only eight or nine days.”

The company is buying Gairdner, Buloke, Commander and Hindmarsh barley, some APH wheat and a large amount of ASW.

Depending on the northern summer cropping season, it will also look to put together parcels of sorghum and cotton seed next year.

Mr De Bono said Chinatex was meeting an increased appetite for imported grain from China.

“We will look at doing a bulk shipment for the first time, most likely out of Geelong.”

In terms of its pricing, Mr De Bono said Chinatex was offering cash prices and contracts to take grain out of warehousing.

“It’s a pretty simple model at present.”

Mr Devereux said part of the grower interest in the company had been due to the fact it had been extremely competitive in its pricing, frequently offering the best bid at silos.

Chinatex has tendered its accumulation out to Ausrealt International, the company Mr De Bono works for, which is owned by the Luo family and also does some accumulation on its own.

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FarmOnline
Gregor Heard

Gregor Heard

is the national grains writer for Fairfax Agricultural Media
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READER COMMENTS

Deregul8
13/12/2013 7:42:58 AM

Note to all the naysayers of deregulation - the more buyers you have for your product, the higher price you will receive. All the claptrap that gets peddled by conspiracy nuts on these forums is just that - uneducated diatribe. The reality of real world markets is they are far better than the alternative of governmnet over-regulation. Some of you can now get paid overnight for your sold grain. Wake up and smell the roses. Deregultion is the only path forward.
Consolidated
13/12/2013 7:46:36 AM

The Single Desk system never paid for your wheat the next day! A win for the free market. The old clingers on will find it hard to rationalise the arrival of these new Asian entrants but they'll gladly take the extra dollars for their grain eh?
mark2
13/12/2013 9:32:15 AM

……er, doesn't Mr De Bono say in this article that Chinatex is a subsidiary of a state- owned enterprise?
Deregul8
14/12/2013 7:39:18 AM

I guess there won't be any problems with payment then eh mark? We have been getting paid in 14 days for our grain for 3 years now. Most of the East Coast until now has been on 30 days. The fruits of deregulation are for all to enjoy, even those that do not realise they are beneficiaries of it
Pete.
15/12/2013 5:03:22 AM

In my area of growing grain we need better prices so we the farmers that create the product actually get paid a fair price and profits go back to the grower and not the share holders of multi nationals. It is believed more than 80% and now 90% of grain growers since deregulation would prefer the single desk system-- no argument there surely!
paid overnight
15/12/2013 8:08:09 AM

sold some grain to this mob on wednesday. money was in the bank by thursday. if this is competition then i want more of it!!!
mark2
17/12/2013 1:45:44 PM

Yes it's good to get paid quickly deregul8 . It makes me laugh that you call those of us who support the orderly marketing of grain and grower ownership agrarian socialists yet you have no problem taking the cheque from companies directly linked to the Communist Chinese Government. FYI it was not AWB that set the current payment standard, as I recall we were being paid within 21 days towards the last few years of it's operation which undoubtedly annoyed the private trade, which as it happens now calls all the shots
Jock Munro
18/12/2013 6:58:18 PM

Support for the Chinese Government taking positions in the Australian wheat market, is further proof that some of the bloggers that would have you believe they were farmers, are more than likely to be traders.
Deregul8
19/12/2013 7:50:44 AM

Unfortunately for other growers Jock, your views on the way the market should function do not put dollars into the accounts of farmers. Only the free market will deliver innovation in the quest for winning grain sales from Australian producers. Just as it has here. If the company is State owned, I say all the better because they are not going to default on payments and nor will they be fly by nighters. Xenophobia is a costly state of mind.
X AG Socialist
19/12/2013 8:48:20 AM

Criticizing those who purchase our wheat now are we Jock ?
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