EFFORTS by the CBH Group to increase its shipping capacity have so far proved fruitful after the co-operative last week announced it had offered marketers 540,000 tonnes of additional capacity across the Geraldton, Albany and Esperance ports, which has all been fully booked.
It takes the total additional capacity CBH has offered to the market since October 1 last year to 740,000t, including 200,000t already offered at Kwinana.
In a letter to growers last Friday, CBH chief executive officer Ben Macnamara said their ability to offer more capacity was directly linked to their road and rail transport performance.
"Given the current escalation in global grain values due to the Ukraine conflict, I am pleased that we were able to offer this additional capacity earlier than expected," Mr Macnamara said.
"As our performance improves, we are committed to adding further capacity while ensuring we are meeting customer commitments for the initial 17 million tonnes shipping capacity offered.
"This is a balance of taking on more risks with our shipping execution versus trying to allow WA growers access to the current global values for their grain."
Since October 1, CBH has shipped 6.5mt, which is in line with its export plan.
The first of three additional Aurizon fleets has arrived in WA and is onboard to complement CBH's existing 10 rail fleets, with the remainder of the fleets expected in coming weeks.
With tight transport resources in WA and the ever-present threat of COVID-19 disruptions to the supply chain, last month CBH sought assistance from growers for its outloading program.
"A number of outloading opportunities were outlined, where growers are able to cart grain for CBH directly or through a current CBH road contractor, or lease their trailer or prime mover to a contractor," Mr Macnamara said.
"To date we have received over 25 expressions of interest from growers, plus several contractors, which is a great result, and we thank all who have offered support so far.
"Our immediate focus is on starting to package up work for specific routes and onboarding growers who have registered their interest to enable them to operate safely and efficiently.
With shipping capacity offered by CBH slowly increasing, it is hoped it will allow the co-operative to capitalise on potential market values as a result of the situation in Ukraine.
Russia and Ukraine combined account for 25 per cent of the world's wheat trade and play an important part in supplying wheat to the Middle East, Africa and, more recently, Asia.
The conflict in Ukraine has virtually halted grain and oilseed exports from both Russia and Ukraine which has caused commodity futures to rise sharply in markets in North America and Europe.
That is starting to be reflected in grain prices as international customers assess their alternatives and look to access supply from other origins.
However, Mr Macnamara said in Australia, market values have not fully reflected the increase in futures markets for a couple of reasons.
"Asian buyers are well covered with Australian and Indian wheat until the middle of the year and are waiting to see the outcome of the conflict over the coming days and weeks," he said.
"Shipping capacity in Australia, for the first half of the year, is fully committed with sales and therefore the supply chain does not have enough capacity to cover immediate supply shortfalls from Ukraine and Russia to buyers in the Middle East and Africa."
However, if the conflict is prolonged, restricted exports from the Black Sea will likely see additional demand move to Australia and other countries.
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