December 24, 2011

Western Australia resumes wheat harvest after rain

Winter wheat harvesting in Western Australia is gathering pace after heavy rains stopped work through mid-December.

"It's going pretty hard again now," said Colin Tutt, general manager of operations at Cooperative Bulk Handling Ltd (CBH). "We're worried about more rain coming in the new year, so we've really got to smash it hard."

Unlisted Perth-based CBH dominates storage and handling in Western Australia, a major source of grain for the global trade, through its four coastal terminals and almost 200 upcountry storage sites.

Tutt forecast total receivals into CBH's statewide network at around 13.7 million tonnes of grain - the second-largest crop on record and more than double last year's drought-reduced output.

Typically, 70% of the harvest is wheat, and deliveries to CBH usually account for 90% of total state production. With limited domestic demand in the state, nearly all the grain produced is exported to markets in Asia, the Pacific, Africa and the Middle East.

Most harvesting in the state's central, southern and southeastern regions stopped for a week or more after unseasonable rainfall of up to 250 millimeters over several weeks flooded fields, soaking and damaging ripe crops.

Tutt estimated that about 60% of the unharvested wheat, which could total around 2.5 million tonnes, will be downgraded to general purpose or livestock feed from milling grades for human consumption.

"Shipping has been a pain in the neck," reflecting the low levels ownership of stocks, an unwillingness among farmers to sell wheat at current (low) prices and capacity constraints on rail transportation to ports, including a shortage of train drivers and the low priority given to wheat haulage compared with other goods, he said.

CBH likes to maintain high stock levels in its massive shed at its export terminal at Kwinana, one of the largest in the world, which can store 1.1 million tonnes of grain, to facilitate loading onto vessels for export, he said.