September 14, 2007

 

Australian exporters expect more containerised wheat shipments

 

 

Strong growth in exports of containerized wheat from Australia could continue for some years, a key industry logistics manager said Friday (Sep 14).

 

The growing popularity of containerised wheat shipments is thanks to cheaper container freight rates compared to the bulk trade, CBH Senior Operations Manager Of Supply Chain Quality Dave Fienberg said.

 

Western Australian-based Cooperative Bulk Handling Ltd., or CBH, is in the final stages of quadrupling its container packing capacity to 1.5 million tonnes at its Metro Grains Centre.

 

The Metro Grains Centre, a major container packing facility for wheat in Western Australia, is linked by dedicated trains to a container export terminal.

 

This in part reflects rapid expansion in the industry after the federal government deregulated exports in containers from Aug. 27 as part of wider changes to export wheat marketing arrangements.

 

The fact that exporters are booking containers 18 months ahead of schedule reflects the high demand to use the facilities, Fienberg said.

 

There would be an enormous amount of confidence in the container market for at least a couple of years, he said.

Moreover, ocean freight rates for containers are now more than comparable to rising bulk rates, as demand for China-bound bulk freight rises and helped boost the container trade as well, Fienberg said.

 

The relative cost of packing export containers has been pushed down to around AUS$20-A$25/tonne, he said.

The container option is very attractive for those who want to sell into smaller markets, including many in Africa, the Middle East and Asia.

 

Shipping wheat by the container load requires a smaller investment than shipping it in bulk, he said.

 

Ron Greentree, Australia's biggest private wheat grower, estimate the trade could expand to 4 million tonnes a year, more than four times the current export level. 

 

Bulk wheat exports posted a record high of around 17.6 million tonnes a year in 2003-04.

 

Greentree is establishing a substantial container export trade and estimates the bulk freight rate to Japan stands around AUS$65-A$70/tonne compared with AUS$40/tonne for containers.

 

Fienberg said the growth in the container trade and another small crop of winter grains this year due to dry weather would "significantly reduce" volumes through CBH's bulk export terminal at Kwinana Port.