June 25, 2009

CBH Group, Australia's largest grain handler, said Wednesday (Jun 24) port and land-transport logistics would be better managed for the next wheat harvest starting in November.

The addressing of the transport bottlenecks will greatly boost grain exports, according to the company, which handles most of the grain in Australia's top wheat-exporting state of Western Australia.

The world can now expect Western Australia to be a reliable source for wheat, especially at the next wheat harvest, said CBH's new chief executive Andy Crane.

Earlier in the year, a surge in export demand overstretched the company's grain handling capacity, causing shipping delays. CBH blamed the problems on Western Australia's neglected rail network which limited the ability to transport grain.

Crane said CBH planned to use more road transport and it was in talks with the state government about improving the rail system which needed investment.

Privately-owned rail track operator WestNet Rail plans to close some country rail lines unless state and federal governments commit A$400 million (US$320 million) to upgrading Western Australia's grain freight network.

Crane said the company is prepared to divert investment into improving the rail network if it sees similar support from the rail lines, and that at least 50 percent of the state's grain should be transported by rail.

The group is also preparing to invest in expanding its grain accumulation and marketing activities while eyeing expansion opportunities in eastern Australia.