February 21, 2012

 

 

On the back of rising national output and strong demand in the Middle East and East Asia, Australia's Emerald Group expects grain exports to rise 20% in the current fiscal year to around three million tonnes, Chairman Alan Winney said Monday (Feb 20).

 

Emerald's total grain sales are expected to reach four million tonnes in the year ending June 30, up 18% from 2010-11, Winney said. Wheat usually accounts for 65-70% of the company's sales, he added.

 

Australia's wheat is competitive in the Middle East and Emerald has enjoyed strong sales this year. Emerald, now 50%-owned by Japan's Sumitomo Corp., is one of Australia's top grain exporters to Japan, Malaysia and Indonesia, he said.

 

Australia's government has forecast wheat output will rise 5.7% to a record 29.5 million tonnes in the current crop year ending March 31, but Winney said actual output may be closer to 28.5 million tonnes.

 

A large part of the current crop is still with the growers and output looks higher than actual due to a near record carryover from 2010-11, Winney noted. Growers have enough capital and are putting off sales so that part of their taxes spill over to the next fiscal year, he added. There is also strong pressure on infrastructure due to the surge in output.

 

"Exporters have booked shipping slots for the rest of the year and have made forward sales to buyers until July," Winney said.

 

Australia's October-December wheat exports rose 31% to nearly five million tonnes, including 2.06 million tonnes in December, official data showed.

 

The country can't sustain exports of two million tonnes month after month due to logistical constraints, he said, adding that actual shipments will be 1.5-2.0 million tonnes.

 

Emerald recently acquired full ownership of the Melbourne Port Terminal and is aiming to increase the terminal's annual grain handling capacity to 1.2-1.5 million in a few years from less than one million tonnes.

 

"We are interested in funding other opportunities to improve port efficiencies on the East Coast and South Australia, which will boost Australia's ability to expand exports in tandem with output."

 

Noodle wheat exports to Japan recently started for the first time from Western Australia's Albany port at Emerald's initiative, he said. Emerald is the third-largest grain trading company in Western Australia by volume, with a share of 12%, Winney added.