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December 12, 2014

12/12/2014: Auction system at SA ports saving grain growers money

An auction system for slots at South Australian ports will give growers an extra Aus$90 million this season, according the state's grain lobby, ABC News reports.

Since 2012, exporters wanting to access grain terminals at SA's seven ports have had to place a bid for the slot, a move that Grain Producers SA says has increased the demand and price paid for SA grain, because exporters now have a stronger incentive to use the slots they've won at auction.

 

http://www.abc.net.au/news/2014-12-12/nrn-shipping-slots/5957576

GPSA says in many cases SA wheat has sold for between Aus$10-Aus$20 a tonne higher than West Australian grain this season. 

GPSA chief executive officer Darren Arney says the previous 'first-in-first-served' system was inefficient, and with the introduction of auctions, competition at the ports has increased.

"We're very keen on the auction system because it provides competition for all levels of exporters to participate and it's worked out quite well for growers this season.”

South Australia's monopoly grain handler Viterra established the system which was approved by the Australian Consumer and Competition Commission, and the auctions themselves are run by a third party, specialist firm Trade Slot.

Mr Arney says if the same market-based principale were applied upstream grain growers would save even more money.

"If we can have a more competitive handling and logistics situation upcountry, that could also lead to more competitive fees which could then also lead to better returns for growers." 
 
  


Read more HERE.
 


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