New player opens can of worms
WA's grains industry contributes more than $4.5 billion in exports to the WA economy each year.
According to the Department of Agriculture and Food, grain is the State's largest and most valuable agriculture sector and is among the State's top export earners.
While investment in research and development continues by the scientific community, machinery manufacturers and on the ground by farmers, marketing of grain has also changed.
Since the single desk was abolished four years ago, the number of accredited wheat exporters has grown to 26.
Each one is vying for a larger percentage of market share and the next logical step, where appropriate is investment in infrastructure.
International marketer, Bunge, is due to make an official announcement anytime soon regarding their $30 million investment to build a 50,000 tonne grain storage facility at Bunbury.
When the first load of grain is actually exported, using existing berth infrastructure, it will be the first time in 20 years grain has been shipped from Bunbury. But getting grain to port is one of the biggest challenges facing the grains industry nationwide, not just in WA.
Debate is heating up in Bunbury over a lack of consultation and safety concerns for 500,000 tonnes of grain to be transported by road to the port starting in 2014.
Further pressure is also expected to be put on the road network with the closure of Tier three railway lines.
If accredited exporters do invest in infrastructure, it will impact strongly on the throughput and economies of scale CBH has in place for its up-country and port facilities.
But it while many exporters are saying little about their plans, fearing damage to their relationship with CBH, competition is known for driving innovation.
The board of CBH is already well aware the monopoly it controls is set to change forever and is working on strategies to work within the changing industry.
Ports across the grain belt have also confirmed exporters are hungry to set up their own export arrangements, outside of CBH's port facilities.
But when the due diligence of investment is considered, a key issue will be allocating scarce port land to a commodity that may not result in a net increase in trade.
One factor in favour of investment is the slowing of the mining industry.
As it slows, the value of the Australia dollar is expected to fall making Australian grain exports more competitive on the international market.
In turn, this could drive investment in infrastructure.
Also critical to steering the future vision of the grains landscape is the fate of the Wheat Export Marketing Amendment Bill 2012, which has been shelved and is the subject of strenuous lobbying by grower groups and bulk handlers alike.
If it gets the nod in its current form it will see Australian wheat exports fully deregulated by 2014 in line with recommendations in a 2010 Productivity Commission report and further change the WA grain scene.
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