CBH hikes supply chain fees by $2.20 per tonne to bankroll capital investment and account for inflation

Headshot of Cally Dupe
Cally DupeCountryman
CBH's Brookton site.
Camera IconCBH's Brookton site. Credit: Cally Dupe/Countryman

CBH Group is hiking up grower receival fees and exporters’ port terminal shipping fees by $1.10 per tonne each – to total $2.20/t – to counter rising inflation and bankroll its capital network upgrades.

The cooperative broke the news in an email to its 3900 grower members this morning, saying the total $2.20 per tonne increase in supply chain fees would help “elevate investment in the network”.

CBH recently revealed to growers it had developed a new strategy with a target of being able to receive an average 22mt crop and out-turn 70 per cent in the first half of the year by 2033.

To do so, it plans to spend $250m per year for five years to upgrade its supply chain infrastructure.

In the email this morning, CBH explained that supply chain fees were set according to capital investment, the expected tonnes delivered by growers in the upcoming harvest, and the operating cost structure.

CBH chief operations officer Mick Daw said CBH – Australia’s biggest grain exporter – wanted to be able to export three million tonnes of grain from its four WA ports per month by 2033, up on the current 1.6mt capacity.

The $2.20 increase announced this week was on par with last year’s increase, Mr Daw said, and CBH would also allow for a moderate increase in debt to help fund the essential network projects.

“It’s about funding capital projects and making sure we’re in a position to continue to make good investments to increase the performances,” he said.

Mr Daw declined to comment whether the fee increase was likely to be around the same next year, but said it would be “in line with inflation” at least.

Charges vary according to grain type, but the increase brings these to $31.60/t for wheat, up from $29.40/t last harvest.

The move means the grain receival fee for 2022-23 for wheat will be $11.35/t, which is paid for by the grower.

The marketers will pay the shipping fee which will be $20.25 per tonne.

CBH’s goal to be able to export 3mt per month by 2033 comes as the size of the WA harvest continues to grow – with a 21.3mt of WA’s record 24mt of grain delivered to CBH last harvest.

Mr Daw said being able to export 3mt per month by 2033 would “generate price value for growers, both current and future” by shipping more grain during the first half of the year, before the northern hemisphere crop is available to grain-buyers and prices for Australian grain are higher.

CBH has spent more than $1 billion on its network during the past six years, adding 2.8m tonnes of permanent storage and more than 80 throughput enhancement projects, and more than 400 sustaining capital projects.

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