PORT KEMBLA has joined Newcastle and Brisbane as a destination for grain from South and Western Australia making its way into the drought-affected eastern Australian market, with one vessel said to be arriving next month, and another booked for October.

Port Kembla is home to two grain terminals, one operated by Quattro (far left) and the other by GrainCorp.

Cargill Australia has booked the October shipment, which will discharge some of its cargo at Port Kembla, New South Wales’ only bulk grain port outside Newcastle.

“We are doing a feed wheat cargo out of WA and it will unload at Kembla for southern NSW, and then Brisbane for northern NSW and Queensland,” Cargill Australia corporate affairs director, Peter McBride, said.

“The feed wheat has been sold to feedlots and some has also already sold free on truck.”

While a string of vessels has been bringing wheat and barley from southern Australian ports into Brisbane since November last year, and into Newcastle in recent months, destination Port Kembla had been harder to justify.

This was because grain use close to Port Kembla was limited largely to the Manildra Group’s flour-milling and ethanol plant at Nowra, and the dairy sector, whereas Brisbane and Newcastle supply numerous mills as well as large numbers of livestock within 300 kilometres of the ports.

A premium in recent weeks for feed wheat and barley in the southern half of NSW has developed because of the market’s distance from feedgrain in Victoria, and WA and SA grain off the ship in Brisbane and Newcastle.

Traders have said this has made numbers for grain into Kembla stack up against feed sourced up country.

Demand has come from feedlots, the poultry sector, and those paddock-feeding sheep and cattle in the face of limited or non-existent pasture and winter-crop growth.

The African Dove docked last night in Brisbane, bringing grain from Esperance in WA, and COFCO last month shipped 34,000 tonnes of wheat to Brisbane from Albany.

The Luchow, which sailed from Albany in Western Australia on 11 August carrying 32,000 tonnes of wheat and 6000 tonnes of barley, is docking in Newcastle this week.

Million-tonne market

Trade sources have estimated that up to 1 million tonnes (Mt) of grain will come into NSW and Queensland by ship from southern Australian ports, with most carrying 25,000-35,000t of wheat and/or barley.

An average of 60,000t per month shipped from southern ports to Brisbane, Newcastle and Port Kembla between December 2017 and March 2018 would equate to nearly 1Mt, and trade sources say up to four vessels per month have been arriving.

The question for the market now is how much of the sorghum crop, which is due to be planted in Queensland and northern NSW this spring, will satisfy domestic demand.

Feedlotters will opt for wheat and barley from the upcoming winter-crop harvest in preference to sorghum, but the summer grain would be snapped up by those feeding poultry and pigs.

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