Grain shortage to shift market dynamics

SA harvest: domestic buyers to play larger role


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Grain Producers SA chairman Wade Dabinett.

Grain Producers SA chairman Wade Dabinett.

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WITH the national grain harvest likely to be well below the long-term average, domestic buyers are expected to play a far more prominent role in the SA grain market this year.

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WITH the national grain harvest likely to be well below the long-term average, domestic buyers are expected to play a far more prominent role in the SA grain market this year.

Grain Producers SA chairman Wade Dabinett said rather than the usual domination of exporters, this year grain would be “pulled from all over the place and ultimately bring in new and different players”.

“This year the market is not an export market, it will be a domestic, east coast pool,” he said. 

“It will certainly be a year that growers will need to look at what the silo site price is, but there will be a lot of offers for off-farm grain with people buying it directly out of the paddock.

“I expect that will be a fairly solid trade in the Mallee. 

“But solvency with counterparts should be top of mind for growers because in a big drought year and with high prices, everyone needs to be cross-checking transactions.” 

Mr Dabinett said it was even more pertinent because most growers would trade with the central system that dealt with familiar buyers. 

With varied quality expected, Mr Dabinett said it would be up to farmers to manage markets paddock-by-paddock or even within paddocks.

Low test weights, low oil content, frosted grain and high screenings are expected at harvest and he said the priority for growers should be finding the best market angle to maximise return.

“Obviously we will have a big east coast pool but it will not be for all grain,” he said.

“Farmers will need to get a handle on quality but also understand the market for their grain.

“The price at sites is dependent on freight costs to the port but I expect sites near the border and the Mid North’s main rail heads will trade at a premium because they are the least cost pathway into the east coast market.” 

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