10/03/14: Landline – Against the Grain; Update Commodities

Against the grain

ABC TV program Landline presents various views about the aftermath of last year's failed US takeover of east coast grain handler GrainCorp.

Presenter, Pip Courtney, says "The Federal Government's decision to reject the takeover bid of US giant Archer Daniels Midland took many by surprise. Some growers, particularly on the East Coast, were delighted, while others warned the decision could scare off badly-needed foreign investment."

One thing most people seem to be in agreement about is that Australia’s grain handling infrastructure is aging, inefficient and badly in need of an overhaul and modernisation. The program which can be viewed on line asks: “So now ADM is out of the picture, where will this investment come from?”

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Grain (Photo credit: Frapestaartje)

Commodities update

"There's nothing like the threat of an invasion to stir up troubles with world trade and so it is with Ukraine. Ukraine is a big wheat, corn and barley exporter, so when the Russians marched in, markets got the wobbles and prices moved north," says Kerrie Lonergan, in his weekly commodity update professionally delivered each week on Australia’s ABC TV Landline program. 

Ron Storey, from ACF-PoFarmer, highlighted: "The key issue here is that the Black Sea is a major contributor now to the grain supplies around the world. They make up around 25 per cent of the world export grain market. Certainly, Ukraine is a significant corn exporter, expecting to export around 15-20 million tonnes of corn this year and around 10 million tonnes of wheat and then you add Russia on top of that." 

When asked who might be the winners if such a conflict were to escalate Ron says, ‘Canada has a significant logistics problem at the moment. The Australian shipping steam, as we call it, which is the forward bookings around the ports, is very fully booked for the next six months. 

"So, our capacity to respond is not high. Certainly, we'd be able to squeeze some more out, but probably the biggest impact would come out of the US and South America where the South American corn crop and soybean crops are just coming off. So there's places that the grain will come from, but the impact would be felt across the broad grain market irrespective of what the source of the grain would be."

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