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September 10, 2014

10/09/2014: Trouble at port - for new allocation system in Australia

Australia's largest wheat exporter, CBH Group, has scrapped its plans for a new system that allocates port access at its grain terminals following complaints from some users that the scheme was unfair to new entrants to the market, reports Reuters' Colin Packham.
 
http://www.reuters.com/article/2014/09/09/australia-wheat-ports-idUSL3N0RA0ZJ20140909
A 'fairer' system to allocate grain, scrapped

Australian regulations require grower cooperative CBH Group to offer access at its four grain terminals in the state of Western Australia to rival exporters, such as Cargill and Glencore.

The company said in a statement on Tuesday that it would bin the proposed new system for doing this after feedback to the Australian Competition and Consumer Commission.

The system, under which slots were to be allocated based on historical shipping performance in Western Australia, had drawn fire from the market.

"If everyone had got about 60 percent of what they applied for, it would have been accepted," said one grains trader, referring to allocations for a prime shipping period at the start of 2015.

"But they gave the big guys 80 percent of what they applied for, while others got 20 percent," he said.

CBH acknowledged the high demand for the prime season slots, but said it had received support from over 90 percent of the market.

"We are getting some conflicting messages from the market. With this in mind we've had to reconsider the system to make sure that we have capacity allocated for the coming harvest," said David Capper, CBH general manager of operations.


The firm said it would continue to use its current auction system to allocate port access.


Read more HERE.
 

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