Carrot for exporters to move grain pile

CBH is offering exporters financial incentives to ship grain out of WA in the final months of the year as it prepares to juggle the biggest harvest on record.

The giant farmer-controlled co-operative’s biggest headache as it prepares for the flood of grain is the dearth of bookings for harvest shipping.

Growers are reluctant to sell grain with prices at 10-year lows. As a result exporters are wary of taking orders and booking shipping slots they may not be able to fill despite forecasts that WA could produce more than 18.5 million tonnes of grain.

CBH operations manager David Capper said harvest shipping was a key component of managing a big harvest like the one about to start.

“Prices have been depressed, growers have not been selling the crop and as a result of that exporters aren’t making sales and putting vessels in,” he said.

“We have been and will offer exporters incentives to ship out of WA. Some sales will be made out of Australia in November-December and we are trying to make sure those sales, or the majority of them, are out of WA rather than other export States.”

The incentives take the form of a payment per tonne, usually $3 to $5. The money comes out of the storage and handling division’s budget.

Mr Capper said the incentives would apply to “certain vessels, at certain times, at certain ports” and was available to all exporters including the CBH marketing division.

“It is probably not enough to close the gap between what a grower is willing to sell for and what a customer is willing to pay in most cases, but we know sales will be made and hopefully this attracts them to WA rather than say South Australia or NSW,” he said.

“Harvest shipping is really important for us. It is the most efficient grain we handle because we don’t have to tarp it (cover it with tarpaulins), we don’t fumigate it and we only handle it once.

“ It also ensures we can keep essential road and rail movements happening and keep turning grain through sites and providing service to growers coming in with grain.”

CBH will open all but 25 of its 202 receival sites spread from Binnu, north of Geraldton, to Beaumont, east of Esperance, and employ 2000 casual workers to handle the harvest.

The 25 sites not opening are considered the least efficient for receivals and the vast majority have been filled with grain carried over from last harvest.

It is also building 800,000 tonnes of emergency storage capacity. This will supplement 200,000t of extra capacity it built this year and take the network total to more than 20mt.

Growers will begin paying a storage fee on grain carried over from last harvest from October 1. CBH expects sales to reduce the carry over from about 1.5mt to 1mt by November.

Mr Capper said CBH expected to receive anywhere between 15-17.6mt of grain from its 4145 grower members. Supply chains not operated by CBH take will take in about 1mt.

The CBH forecast varies widely because growers are waiting to gauge the impact of recent frosts. A cold winter and cool, wet September has led to some crops being slow to head and parts of the Albany and Esperance port zones are waterlogged.

Harvest has started in a small way on the eastern edge of the Wheatbelt but will begin in earnest later than in recent years because of the cool and wet conditions.