THE first export vessel commissioned by SALIC Australia finished loading at Port Kembla’s Quattro Ports on Sunday and has set sail for the Kingdom of Saudi Arabia.
The 60,000-tonne cargo of wheat is bound for the Saudi port of Dammam, and is part of the the 355,000t called for in February in the Saudi Grains Organization (SAGO) investor tender.
In a statement, SALIC Australia said it was the first of multiple bulk export cargoes the company has planned for this year
Saudi Agriculture and Livestock Investment Company (SALIC) has investments in Canada and Ukraine as well as Australia, and Ron McCalman is general manager of SALIC Australia’s Merredin Farms.
The 211,000-hectare cropping and livestock farm produces more than 120,000t of grain annually, but Mr McCalman said the price and profile of NSW wheat saw the first SALIC Australia cargo load in the east.
“This particular tender was the SAGO investor tender and it is open to Saudi entities overseas with assets in Canada, Ukraine and Australia,” Mr McCalman said.
“There was an opportunity for us to place grain into the kingdom, and the quality was right.”
All states potential suppliers
Saudi typically buys milling wheat of 12-12.5 per cent protein.
Mr McCalman said that could include wheat out of WA, as well as wheat grown in all other mainland Australian states.
“WA does have protein wheat grown in the Geraldton zone, and the opportunities for it to go to Saudi Arabia will exist when factors such as freight rates make sense.”
SALIC Australia has said it would work closely with a range of Australian trading, export and broking companies to ensure smooth accumulation, logistics and export.
In the case of its first cargo, the company worked with two Sydney-based companies, Arrow Commodities and Basis Commodities, on execution.
“We made sure we engaged the expertise to assist with Australian origination because if you can make the whole supply chain work efficiently, it’s better for everyone.”
“The opportunity here for Australia is that it’s very good to have another well-connected market participant that gives a different profile.”
Already big on barley
SALIC’s investments are based around improving food security and price stability for the kingdom.
On its website, SALIC said it imported its first cargo of high-quality wheat, 64,000t from Ukraine, last year.
With China out of the market for Australian barley, Saudi has returned as Australia’s volume barley customer to build on a strong relationship stretching back decades.
Out of the 2.7 million tonnes (Mt) of barley exported by Australia in the January-March quarter, 1.6Mt has gone to Saudi via SAGO tenders.
Mr McCalman said SALIC could now bid for business in Saudi barley tenders with grain from Australia and other origins.
In a statement, SALIC Australia said the company’s “groundbreaking foray into the grain-export market” would generate benefits for the Australian grains industry over coming months and years.
“Given its ongoing investments in Australian agricultural production and supply chain, more and more of Saudi Arabia’s food requirements will be filled by Australian produce, which is ultimately good for prices and competition here in Australia,” the company said.
“The investment in export has come at a good time for Australia, particularly with the bumper 2020-21 winter crop looking for alternate export homes.”
In the January-March quarter, Australian shipped 299,995t of wheat to Saudi out of total shipments totalling 6.5Mt.
Saudi Arabia is also an important market for Australian meat and live sheep.