CLEAR Grain Exchange (CGX) has traded 385,564 tonnes in the past week, the highest weekly trade volume for current crop year starting October 1, to lift the traded total for the past 12 months to more than 4.2 million tonnes (Mt).
CGX managing director Nathan Cattle said the growth in volume traded on the platform showed the market was now more familiar with it.
“We feel the benefits of a more efficient market are better understood by all participants in the grain industry,” Mr Cattle said.
“On the seller side, the ability for growers and their agents to set the prices they want and plan their sales according to their specific needs has helped simplify the selling process so they can make better decisions”.
“Buyers are benefitting from seeing the offer side of the market so they can better plan their logistics and accumulation plans”.
CGX was a start-up before being purchased by NZX Ltd in 2009, which ran it until it was privatised in 2016.
Elders now owns a 30pc stake in the business.
The exchange has traded more than 15.4Mt of grain since its inception.
Mr Cattle said efficiency gains on both sides resulted in value creation within the market, with parcels of grain regularly trading at prices above expectations.
“The exchange is designed to improve price discovery in the industry, and we’re glad it’s doing that.”
CGX operates in all of Australia’s grain-growing states and provides a means for growers and their agents to sell grain stored in warehouse at the price they deem is fair value.
“Growers and their advisors simply determine the price they are willing to sell for and offer their grain for sale at that price, all buyers can then see it, crunch their numbers and try to buy it”.
While CGX has no fee to hold an account or offer grain, it does charge a small per-tonne fee when the grain sells, and encourages growers to factor that into the offer price.
If grain sells, growers are protected by a secure settlement process whereby they retain title of their grain until funds are secured.
Because of this process, all parties remain anonymous which is important to ensure there is no potential bias impacting the market or price.
“An exchange has to be independent.
“CGX is not a buyer, seller or advisor of grain”.
“If an entity is trying to operate a transaction platform for third parties, whilst also being a potential principle in a transaction, that creates an inherent conflict that can influence the operations of the market, the effectiveness of it, and ultimately the price”.
Growers appear to have better awareness of this now with more opting to use CGX as their preferred selling tool.
“There should be no downside in using the exchange; growers simply need to be responsible for their sale price, and if in doubt they typically start with a higher price”.
The exchange now has more than 10,000 NGR numbers registered to offer grain for sale, with 80 agent or consulting businesses able to manage offers on behalf of their growers, and more than 300 buyers ready to search and purchase grain.
The option for grain to trade for delivery now or delivery in future months, along with deferred payment options, has also been a win for buyers and sellers in managing cashflow.
Following are some metrics for CGX’s 2022-23 season to date:
- 86 buyers have purchased grain;
- 2944 sellers have offered grain;
- 45 agent and/or advisory businesses sold grain on behalf of growers;
- 90 different grades have traded over 10 commodities: wheat; barley; canola; sorghum; oats; lupins; faba beans; chickpeas; lentils; field peas
- Grain has traded in a total of 15 port zones across Australia’s five mainland states.