THE ability for CBH Group to export grain from the system has been put under further pressure after the co-operative's market and trading (M&T) division secured less shipping slots than usual for the upcoming year.
The situation has cast more uncertainty around the current pricing differential which has seen growers earning far less for their grain than what the international market is offering.
For its part, M&T has long-term agreements (LTAs) and also participates in the first-in, first-served (FIFS) system in order to secure additional shipping slots.
With more exporters than ever vying for those FIFS slots, M&T ended up with a reduced allocation compared to previous years.
"The FIFS shipping release for 2022/23 saw a record number of traders (18) awarded annual shipping slots, providing WA growers with more choice in who they want to do business with for access to global markets," said CBH chief marketing and trading officer Jason Craig.
"We have slightly less FIFS shipping slots than what we've had in previous years, but we are still the largest player in the market and we haven't run out of slots yet."
While the actual number of shipping slots, both LTA and FIFS, held by various exporters is kept confidential, it is known which months and from what ports those exporters have an allocation.
Comparing month and port combinations - four ports and 12 months for a possible 48 combinations - CBH has capacity booked in 40 month/port slots for 2022/23, whereas in 2021/22 it shipped out in 47 out of 48 possible slots.
In terms of the other larger exporters, Viterra had allocations in 29 slots in 2021/22 and has 35 this year, while Cargill Australia had 14 last year and has six more for 2022/23.
New players this year included Arrow Commodities, Agrigrain, Quadra Commodities, ETG Commodities and Demeter Cormack.
Exporters participate in the FIFS through PortQ, which effectively works the same as booking tickets to a music concert.
The shipping allocation is released at a certain time, in the same way seats at a concert would be, and getting access is simply a matter of who can click their mouse fastest.
While that system has worked really well for four or five years, there was more competition this year with 18 players getting involved, compared to 13 in 2021/22.
Some years, when the shipping capacity exceeds the estimated size of the crop, not all of those FIFS slots are sold, but this year those slots were sold in less than one minute.
In fact, last year was the first time shipping capacity was less than the crop size and that has now been the case a second year in a row.
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WA Grains Group chairman and Coorow grower Alastair Falconer said the fact CBH missed out on shipping slots was disappointing, but it shouldn't be affecting grain prices as other marketers had picked up the slots.
"The question now is how much of this year's crop is forward sold, is this impacting on the price the trade is offering and have they already reached capacity?" Mr Falconer said.
"As growers, if we had access to the amount of forward sales coming into harvest this would make the market more transparent.
"This season with early rains and strong commodity prices at the beginning, many growers have a greater percentage forward sold than usual."
With some traders, including CBH, pulling bids early each day, growers are more confused than ever about what is happening with grain prices.
With fewer shipping slots available, M&T can only buy a certain amount of tonnes per day and because of the demand from growers to sell their grain, it is buying all of those tonnes in a very short period of time.
"Our pricing reflects close to the export parity, so we're $30-50 above everyone else, and while we're trying to progressively buy grain, we're getting bowled over by the amount of tonnes growers want to sell," Mr Craig said.
"We're trying to reflect where the international market is and we're trying to price that on a daily basis.
"However, the rest of the market is not really reflecting international values - they may or may not follow us, but if they do then that's good for Western Australian growers."
As the second largest exporter from WA, a spokesperson for Viterra said the company was a significant buyer and exporter of WA grain across all four port zones of the CBH network.
"We have a local team who provide competitive pricing to buy grain directly from growers and grower consultants and we have been part of the WA industry for nearly 20 years, exporting the full range of commodities grown in the State," the spokesperson said.
"WA is an important origin for Viterra as the biggest grain producing State in Australia and the consistent quality growers produce each year meets the needs of our international customers."
For the team at WAGG, Mr Falconer said they could see shipping slots becoming a commodity in themselves.
"In the short-term shipping slot trading, which is a cost to exporters, is passed on to the grower," he said.
"We have a very rare opportunity to grow a large volume crop while world prices are at a record high.
"Not being able to take advantage of this, particularly while the cost of growing the crop is already so high, means growers' ability to buffer their balance sheets is limited."
