Port exemption for Cargill in SA

03 Mar, 2016 02:00 AM
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IT IS not likely to garner the same headlines as Emerald Grain’s proposed new port on the Eyre Peninsula, but another grain exporting facility in SA quietly took another step forward last week.

The Australian Competition and Consumer Commission (ACCC) has made a draft recommendation that Patrick’s Berth 29 facility at Port Adelaide, used by Cargill with its mobile grain loading equipment, be exempt from the port access code.

Cargill successfully trialled a mobile ship loader at Port Adelaide at the Patrick berth last year and now the site is being formally assessed as an ongoing grain exporting concern.

Spokesman for Cargill Peter McBride said the mobile loader was used to allow the company to move grain from its GrainFlow storage and handling sites directly onto ships.

However, those expecting Berth 29 to become a serious competitor to Viterra’s stranglehold on port logistics will be disappointed.

It is believed there is capacity to export around 200-250,000 tonnes of grain out of the Berth 29 facility, out of an estimated SA crop of 7.18 million tonnes last year.

Grain Producers South Australia chairman Garry Hansen said, however, any competition was welcomed by growers.

“It provides an alternative destination for those delivering into GrainFlow sites,” Mr Hansen said.

“Sure, it is only small at this stage, but it could lead to something bigger down the track, and we welcome all competition on the logistics front.”

Mr McBride said the mobile ship loading experiment had the potential to reduce supply chain costs and drive efficiencies, as well as give the company greater flexibility in serving export customer demand.

The mobile loader does not mean Cargill will exclusively export through its own facility.

“Cargill will also to continue to use Viterra’s SA ports to meet export customer demand,” Mr McBride said.

For its part, the ACCC said it believed the berth warranted an exemption from the port access code.

“The ACCC’s preliminary view is that Patrick will face sufficient competitive constraint to warrant granting it an exemption from certain parts of the code when providing services at its Port Adelaide facility,” ACCC Commissioner Christina Cifuentes said.

She said the ACCC felt Viterra is the dominant provider of bulk wheat port terminal services in SA, especially given Viterra’s extensive upcountry network and that Patrick will continue to face strong competition for bulk wheat volumes from Viterra’s terminals.

The ACCC invites submissions from interested parties on its draft determination. The closing date for submissions is Thursday 10 March 2016.

If the ACCC makes a final determination to grant an exemption to Patrick in relation to its Port Adelaide facility, Patrick will not be subject to a number of the code’s provisions at this port.

These include obligations to provide non-discriminatory access, resolve access disputes through prescribed processes, get ACCC approval for capacity allocation systems and publish certain information.

Viterra owns and operates all major grain exports in South Australia at present.

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FarmOnline
Gregor Heard

Gregor Heard

is the national grains writer for Fairfax Agricultural Media
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READER COMMENTS

Jock Munro
3/03/2016 4:06:29 AM

Why is that SAFF Grain's Gary Hansen would believe that competition will lower logistics charges but not the price of his wheat?! As I recall, Mr Hansen was a champion of deregulation of wheat marketing.
Deregul8
4/03/2016 5:22:20 AM

So you have to have high charges to have high wheat prices Munro? You are a very confused man. Of course it doesn't really matter what Cargill does in your case because they have you blacklisted as a muckraker and refuse to do business with you.
Jock Munro
4/03/2016 6:33:12 AM

No dereg- you need competition or grower co operative arrangements to lower costs and grower united strength through a co op or statutory power to raise prices received. Very simple principles but often misunderstood. I am not aware of the Cargill ban- could you provide me with some details?

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