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Taking the lid off global agri-supply chain bottlenecks

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Agribusiness Australia, e-news, 15 August 2021, featuring an editorial by Georgie Aley

As 2021 rolls into Spring, it looks like another bumper crop for grains, pulses and horticulture. More broadly, we continue to see new challenges for the agribusiness sector, which serve to highlight the fact that in COVID times, you never know what is next.

Georgie Aley. Photo: Agribusiness Australia

Agribusiness Australia’s State of the Industry Report hit the nail on the head in stating that unlocking the industry’s potential would rely on success across the total agri-value chain. While we’re expecting to see good grain yields this harvest, the bad news is that our supply chain is still under significant pressure. We’ve seen significant constriction in the supply of food-grade containers which has not improved over the course of this year. In fact, it has worsened with recent wharf disputes, again exposing the fragility of our global supply chains.

This is of course less of an issue for bulk grain commodities, but it has the potential to significantly impact high value crops such as pulses that require food grade to access international markets, such as chickpeas into Pakistan.

As shortages continue, prices continue to rise. The other compounding issue is even with high prices many shipping lines aren’t confident in taking bookings, preferring to re-sell the empties than wait for a full load container from Australia. If there is no change to the situation, they may rise to the point where it is simply not economic to ship high value pulses this harvest to key markets in India, Pakistan, the Middle East more broadly, and south-east Asia.

While the issue has been offset this year by booming domestic demand during lockdowns, shipping companies upgrading general-purpose containers, and even shipping empty containers to Australia, it is now being compounded by ongoing “third wave” events around the world and a lack of air freight options, just as we approach a bumper harvest. This challenge also extends beyond Australia with port congestion and container issues also occurring across Europe and the USA.

Unfortunately, there is no silver bullet to resolve this current challenge. Many in the grains industry are considering options for shifting back into bulk export options however this does still leave us short when it comes to container exports – not just for grains but also for red meat, horticulture, seafood and others.

With a more medium to long term view, as a sector we must aggressively focus on continuing the market diversification strategies that many industries embarked upon during pre-COVID trade disruptions, work cohesively to share resources where possible, and work with the Federal Government to identify where short-term assistance is required to alleviate the supply chain hotspots.

This may not solve the immediate problem – and we may not be able to fix the inherent problems in our global supply chains – but a whole-of-industry approach will at least help us get through this period while the world slowly finds its way to re-opening.

Georgie Aley  

Georgie has held a range of senior management and non-executive director roles within the Australian food and agribusiness sector. She is currently the National Food and Agribusiness Sector Lead at KPMG Australia where she leads the Firm’s support for clients across the agribusiness and food and beverage consumer goods sector. Prior to KPMG she held the roles of inaugural Chief Executive of the Australian Institute of Food Science and Technology Limited and Managing Director of the Grains & Legumes Nutrition Council. Georgie is currently a non-executive director and Chair of Pulse Australia Limited.

Georgie’s industry leadership has been strongly recognised across her various industry positions. She was the inaugural recipient of the Rabobank Emerging Agribusiness Leader of the Year Award in 2013; recognised in the Fairfax Media’s Inaugural 100 Women in Australia Agribusiness and acknowledged by The Australian Financial Review in the 100 Women of Influence in 2014. Georgie holds a Bachelor of Equine Business Management from the University of Sydney, Masters of Business Administration (MBA) from the Macquarie University Graduate School of Management and is a Member and Graduate of the Australian Institute of Company Directors. Georgie is also a Director of Agribusiness Australia.

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