THE 21/22 season will be the first season as a bulk exporter for us, Western Australian-based AAAX and our joint venture partner ARIA Commodities.
It's actually the perfect year to start - the crop in WA looks fantastic and Australian grain is very competitively priced into its major export destinations.
We saw a great opportunity for a new exporter to come in and give growers another option, and we wanted to move quickly.
One of the main barriers to entry for new companies coming in, is it takes time to build your brand in the market to get growers comfortable selling to you.
So, on entering the bulk export space, AAAX decided to take advantage of the Secure Settlement Service that Clear Grain Exchange provides to settle all our contracts and make payments to growers.
The innovative settlement process ensures growers retain title of their grain until they are paid.
If payment is not made, growers retain title of the grain and can sell it to someone else.
This process of using a clearing house is standard practice in the stockbroking industry.
Currently the standard practice in the grain industry is for growers to transfer title of their grain first and then wait for the buyer to pay them.
This means growers should be assessing the credit worthiness of every buyer which can restrict the market they are selling to and ultimately the price.
The added benefit to AAAX is that Clear Grain Exchange is managing all our back-office functions.
This means their systems handle the grower payments as well as payments of various other industry levies, end-point royalties and other industry fees.
We are active buyers on the open exchange that Clear Grain Exchange operates and actively accumulates grain through other channels such as direct grain contracts.
The nomination process to begin settlement is the same whether you sell on the open exchange or direct.
We like that Clear Grain Exchange is an established and impartial third party, with a mandate to create more efficient and secure grain markets.
This has helped make our entrance into the market a lot more seamless.
We have met many different growers across the State over the past few months and so far we have been very encouraged by the support and feedback that both they and the WA grain industry have provided us.
AAAX started buying grain six weeks ago and is on target to have our shipment of 21/22 season grain leave in February 2022, followed by more as the year progresses.
It's an exciting time and we plan to steadily grow the business over the next few years and play our role in getting WA grain to the international markets.
