Thursday 16th Jul, 2020

ACCC: Port access a concern for bulk grain exporters

Australian grain growers and exporters have raised concerns about the fairness and transparency of access to bulk grain export supply chains, including ports, despite the country experiencing its lowest annual grain production since 2007-08 and lowest bulk grain exports since 2011-12.

The Australian Competition and Consumer Commission (ACCC)’s latest bulk grain ports monitoring report found that while grain exporters could generally access Australian ports during the 2018-19 shipping year, concerns still remained about the fairness and transparency of access, especially at facilities operated by CBH and Viterra.

Bulk grain sport terminal services are dominated by three providers – CBH, Viterra and Graincorp – which each have export trading arms competing for port access with third party exporters.

The ACCC said in a release that during the past season CBH and Viterra provided 99 per cent of bulk export services from Western Australia and South Australia, respectively.

It adds that since the 2016-17 shipping year, when grain was exported in significant qualities from eastern Australia, the three dominant providers have loaded 91 per cent of Australia’s bulk grain exports.

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ACCC Commissioner Cristina Cifuentes said the level of competition between port terminals varies significantly among different regions, with the entry of new service providers creating competition in some regions but WA and SA remaining to be serviced by vertically integrated near monopolies.

“Even though many port terminals had excess port capacity this season, exporters and grower groups were still worried about the quality and fairness of port access,” Cifuentes said.

“In particular, they were concerned about their limited ability to negotiate favourable terms with the dominant port operators.

“While some new port terminal service providers have recently entered the market many of them exported very little or nothing at all this season and their ability to compete with and impact the behaviour of dominant providers remains unclear.”

The ACCC said it has continued to hear concerns from growers and exporters about access to upcountry grain storage and handling services.

“In addition to the concerns raised about ports access, some exporters and growers are also still concerned about the terms of upcountry storage and handling agreements and their inability to negotiate non-standard terms of access,” Cifuentes said.

The ACCC has reiterated that it supports a range of amendments to the Wheat Ports Code that could improve the Code’s ability to ensure exporters have fair and transparent access to port terminal services.

“In particular the ACCC believes that the Code should seek to ensure that exporters have fair and transparent access to services at all times, not only when they are seeking access for the purpose of exporting bulk wheat,” Cifuentes said.

“This will encourage exporter participation in markets and increase competition for the grain of Australian growers.”