Grain growers and exporters continue to raise concerns about the fairness and transparency of access to Australia’s bulk grain export supply chains, including ports, despite Australia experiencing its lowest annual grain production since 2007-08 and lowest bulk grain exports since at least 2011-12.
The ACCC’s latest bulk grain ports monitoring report found that while grain exporters could generally access Australian ports during the 2018-19 shipping year, they remained concerned about the fairness and transparency of their access, especially at facilities operated by CBH and Viterra.
Australian bulk grain export port terminal services remain dominated by three port terminal service providers; CBH, Viterra and GrainCorp. Each have export trading arms that compete for port access with third-party exporters.
During the past season CBH and Viterra provided 99 percent of bulk export services from Western Australia and South Australia, respectively. Since the 2016-17 shipping year, when grain was last exported in significant quantities from eastern Australia, the three dominant providers have loaded 91 per cent of Australia’s bulk grain exports.
“The level of competition between port terminals varies significantly among different regions. The entry of new service providers has provided competition in some regions, but WA and SA remain serviced by vertically integrated near-monopolies,” ACCC Commissioner Cristina Cifuentes said.
“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.”
“In particular, they were concerned about their limited ability to negotiate favourable terms with the dominant port operators,” Ms Cifuentes said.
“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 also 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,” Ms Cifuentes said.
The report also reiterates the ACCC’s support for a range of amendments to the Wheat Ports Code that would improve the Code’s ability to ensure that exporters have fair and transparent access to port terminal services. These amendments were proposed by the ACCC in December 2017 and May 2018 and supported by the Department of Agriculture’s Code review final report, released in October 2018.
“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,” Ms Cifuentes said.
“This will encourage exporter participation in markets and increase competition for the grain of Australian growers.”
The full report is available at Bulk grain ports monitoring report 2018-19
The ACCC monitors and enforces compliance with the Port Terminal Access (Bulk Wheat) Code of Conduct, and also has certain specific roles in relation to port terminal exemptions and capacity allocation systems. The code regulates the conduct of port terminal service providers to ensure that exporters of bulk wheat have fair and transparent access to port terminal services.
The bulk grain ports monitoring report, now in its fourth year, examines data on the nature and concentration of export activity across Australia’s bulk grain port terminals, and also presents views from industry consultation with growers, exporters, and port terminal service providers.
The ACCC undertakes monitoring of bulk wheat port terminal services to assess the level of competition at both exempt and non-exempt facilities.