Bulk grain export supply chain concerns raised

Watchdog’s bulk grain ports monitoring report hears from growers and exporters

Bulk grain export supply chain concerns raised
Mick Keogh


The Australian Competition and Consumer Commission’s (ACCC’s) Bulk grain ports monitoring report 2017-18 has highlighted continuing concerns being expressed by growers and exporters about access to Australia’s bulk grain export supply chains, both at port and upcountry.

The report, now in its third year, examines data on the nature and concentration of export activity across Australia’s bulk grain port terminals, and also presents views from industry consultation with growers, exporters, and port terminal service providers.

ACCC notes that three companies – CBH, Viterra and GrainCorp – are responsible for operating most of Australia’s grain export port terminal facilities, and associated grain storage and logistic systems. They are also major grain exporters, as well as providing essential services and port access to their exporter competitors.

The report finds that exporters could typically access some port capacity, but many remained concerned about fairness and transparency of the allocation of port access.

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"Even though many port terminals had excess port capacity in a year of lower production, exporters were still worried about the quality and fairness of port access. In particular, they were concerned about their limited ability to negotiate terms with more dominant providers," ACCC deputy chair Mick Keogh says.

However, overall, the ACCC says growers and exporters had more concerns about upcountry access issues such as grain storage and handling services and transportation.

"We’re troubled that some exporters and growers are still reporting issues in their dealings with service providers at port and along related supply chains," Keogh says.

"Many of these upcountry supply chain issues are not directly addressed under the existing code.

"The ACCC considers upcountry access issues may be more appropriately dealt with through industry-led reform, or through a market inquiry such as the one currently being sought by growers."

The report notes that outcomes are quite varied between different markets.

"The level of competition in bulk grain port services varies significantly between regions. Some areas have multiple service providers, while other areas remain serviced by vertically integrated near monopolies, particularly in Western Australia and South Australia. Users seem to get very different results in different regions," Keogh says.

"The ACCC considers that an appropriately targeted grains code is vital for ensuring port terminal access for all exporters on a fair and transparent basis."

The full report can be found here.


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