A cargo of wheat bound for Asia loads at GrainCorp’s Port Kembla terminal. Photo: GrainCorp

GRAINCORP senior executives have told shareholders that they expect a more balanced global market to emerge, as the company continues to contend with grain oversupply and sustained price pressures.

GrainCorp chief executive officer and managing director Robert Spurway addressed the company’s annual general meeting on Wednesday.

He said market conditions had led growers to hold on to more grain in anticipation of higher prices.

“It is clear that we are experiencing a cyclical global oversupply of grain,” Mr Spurway said.

“For example, this year will see supply of wheat exceed demand by 18 million tonnes, according to USDA.

“This oversupply has exacerbated an already competitive global grain marketplace, leading to continued low grain pricing.

“Growers, who are exposed to these low prices, have responded by delivering a lower portion of the overall harvested crop to market.

“This means that purchasers of grain, such as bulk handlers, grain traders, feedlots and downstream processors are participating in a more competitive marketplace with reduced grain availability.

“For grain handlers, including GrainCorp, this set of circumstances has created an environment where margins are lower.”

Mr Spurway said GrainCorp expected this environment would settle but that the timing was “currently unclear”.

“We expect this set of conditions to revert to a more balanced supply-and-demand environment as local and global inventories become more balanced.

“I want to assure everyone we are managing everything under our control to ensure the impact to GrainCorp’s earnings is minimised.”

Market diversification

China’s importance to Australian grain exports, and by extension to GrainCorp, dominated discussion during the AGM’s question time.

A shareholder asked how GrainCorp’s financials would withstand prohibitive tariffs from China on grain, similar to those imposed on barley in 2020.

GrainCorp chair Peter Richards said even before the pandemic, the company had been “extremely successful in diversifying our end markets”.

He said GrainCorp has continued to “take advantage of opportunities” when they arise.

Mr Richards said this extended to the Chinese canola market, which “opened the door” after China imposed tariffs on Canada.

Mr Spurway said that GrainCorp was “exposed to China” but had a strong track record of diversifying when required.

“It’s got a very large population, and globally is one of the largest importers of agricultural products.

“So it’s natural that we will have exposure to those key markets.

“We have a demonstrated record of when China did overnight close access to barley, we were able to respond extraordinarily effectively and quickly.

“I think that’s something we should celebrate around GrainCorp’s capability.

“The reality is that we trade with markets where we can get the greatest value for GrainCorp shareholders.

“We do so in conjunction with support from the Australian Government to ensure that our interests are protected.

“We also make sure that the way we sell grain protects the value of that shipment, ensuring we get paid for it before it arrives in destination markets.”

Mr Spurway said GrainCorp had “broad market exposure” and was also protected in that “the demand for food [was] growing” and “the world’s population needed to eat”.

“We’re in an extraordinarily secure and protected market in terms of the requirements that populations have to eat.”

Harvest update

As of this week, GrainCorp has received 10.6Mt of grain into its network during the 2025-26 harvest period.

Its year-to-date export volume is 2.3Mt.

Mr Spurway said the summer-crop harvest was progressing in Queensland and northern New South Wales.

“The harvest of the summer crop is now under way, and we have received high-quality sorghum across northern parts of our network.

“Growers across [east coast of Australia], particularly in southern regions, will be eagerly awaiting rainfall to support winter crop planting prospects.”