Chinatex steps up buying

Chinatex has been accumulating grain out of Australia for some years, but this is its first year offering prices at a large number of sites.

It is a name familiar to those in the wool industry, having a long history as a wool buyer, and currently ranking around the third largest buyer of wool.

In the grains sector it has previously been involved as a buyer of oilseeds, but is now ramping up its cereal purchasing program.

Company purchasing manager in Australia Edmund De Bono said Chinatex had previously bought primarily off the trade in Australia, before offering prices at select sites last year.

“This year we have bids at GrainCorp, Emerald and GrainFlow sites, previously we only offered prices at a couple of sites including Nullawil and Lakaput in Victoria and Griffith in NSW,” he said.

Mr De Bono said the company was primarily acquiring grain out of south-eastern Australia this year, due to the difficulties with the harvest in northern NSW and Queensland.

“All the grain goes back to China, previously it has been all in containers, but this year we are also looking at doing some bulk shipments.”

Chinatex is a serious player in the oilseed sector. Mr De Bono said it had an annual crush of up to three million tonnes of oilseeds, or more than the entire size of the Australian canola crop based on a five year average.

Along with that, the company has also been busy buying ASW wheat in particular and both malt and feed barley.

AgFarm account manager Fabian Devereux said it was good to see another active participant in the market.

“It is good to see competition for our grain.”

He said there had been a lot of inquiry surrounding Chinatex, as a new participant in many areas, this year.

“We just say the same as with all sales, it's unwise to do everything with one company, it's great to see someone else in the market, but don’t put all your eggs in one basket.”

Mr De Bono said Chinatex, due to its ties with the Chinese government as a subsidiary of a state-owned enterprise, did not present a counter-party risk for growers.

A speedy payment program earlier in the year created headaches for the company later on when it slowed up.

“We were paying in two or three days, and then logistically it became too hard, as we were buying from new sites, and new growers, so there was all the registration and paperwork required, so it slowed up a bit," Mr De Bono said.

“I had growers ring up and ask whether they were going to be paid, there’s definitely no problems it is just getting things set up, the payment time has blown out a little, but it is still only eight or nine days.”

The company is buying Gairdner, Buloke, Commander and Hindmarsh barley, some APH wheat and a large amount of ASW.

Depending on the northern summer cropping season, it will also look to put together parcels of sorghum and cotton seed next year.

Mr De Bono said Chinatex was meeting an increased appetite for imported grain from China.

“We will look at doing a bulk shipment for the first time, most likely out of Geelong.”

In terms of its pricing, Mr De Bono said Chinatex was offering cash prices and contracts to take grain out of warehousing.

“It’s a pretty simple model at present.”

Mr Devereux said part of the grower interest in the company had been due to the fact it had been extremely competitive in its pricing, frequently offering the best bid at silos.

Chinatex has tendered its accumulation out to Ausrealt International, the company Mr De Bono works for, which is owned by the Luo family and also does some accumulation on its own.