Real test of port code yet to come

Grain Central, December 16, 2016

THE latest report from the Australian Competition and Consumer Commission (ACCC) into the level of competition in grain port operations under the Port Access Code cites the commission as being ‘generally’ comfortable, but that a harvest with greater pressure on capacity will provide a better basis on which to assess efficiency in service provision.

GrainGrowers general manager of policy and innovation, David McKeon, said the report came as no surprise.

“This year’s harvest will provide for a better test of the Code’s capacity to underpin competitive access,” he said.

“Growers have remained cautious about how competitive forces would play out at port terminals. As many bulk grain handlers also own port facilities, if left unchecked they may dominate shipping allocation and thereby access a greater share of the export market.

“However, at a macro level, there is more than enough capacity across Australian grain ports to allow for export of Australia’s 2015 winter crop.”

Mr McKeon said over coming months there would be a lot more strain on the system due to high levels of production and subsequent grain to be moved.”

“We’ve had plenty of rain over winter and spring months this year and over the past week ABARES revised this year’s crop forecast and predicted total Australian winter crop production to increase by 32 per cent in 2016–17 to a new record high of 52.4 million tonnes, including a forecast 32.6 million tonnes of wheat, 10.6 million tonnes of barley and 3.6 million tonnes of canola,” he said.

“This year’s winter crop is breaking records in many states and many port zones.”

Mr McKeon said export volumes would be much higher than average due to the sheer volume of grain.

“Australia’s grain production is geared around export markets, even more so in a large cropping year, and efficient supply chains are critical in ensuring our grain is competitive on the international market,” he said.

“To some extent, it will be more important over the next year that ACCC keep a close eye on bulk grain handlers and port facilities. While competition at our export gateways is critical, it must also be considered as one element of an efficient supply chain.”

“We would also encourage the ACCC to ensure that assessments of general comfort for the system as a whole, are tested at the regional level.

“With the review of the Port Access Code due to start in late 2017, we’ll all be watching port competition and overall efficiency of grain export supply chains closely over coming months.”

Source: GrainGrowers


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