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Query on wheat prices

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This newspaper [The Buloke Times], in the past, has queried the government’s decision to take away the single desk for export from the Australian Wheat Board, an organisation which evened out the returns to growers, and was generally respected by the industry.

Now there are claims that the good seasonal conditions have not been reflected in the returns to growers in recent years, and some companies with a larger share of the export trade have acted in “monopolistic” ways.

The claims arise from a report commissioned by GrainGrowers which analyses significant price anomalies in the 2021-’22 marketing season that might have cost growers markedly.

The report, presented to the federal government late last year, identifies the losses resulting from considerably lower prices paid for Australian products than those paid for other origins.

According to the new chief executive officer of GrainGrowers, the value loss to growers of wheat alone was approximately $2.6 billion.  (There is insufficient information available as to how this figure was calculated.)

An article in Grain Central at the end of March says that GrainGrowers have called for an inquiry by the Australian Competition and Consumer Commission (ACCC).  Alternatives mentioned include an independent review or a Senate inquiry.

The call has been supported by the National Farmers Federation (NFF), Grain Producers Australia (GPA), and the New South Wales Farmers Association.

The research commissioned by GrainGrowers examined Geelong, Kwinana, and Port Adelaide port zones, and compared them with price relativities in three US wheat contracts. Moreover, the analysis is said to show a $65 per tonne discount in the Port Kembla zone for the benchmark APW1 grade to comparable prices from Europe and USA.

The chairman of the NSW Farmers grain committee said the government could compel an ACCC inquiry using its section 95 powers, presenting essential recommendations for reform and addressing grower concerns about the under-pricing of Australian grain.

His association had written to the Treasurer and the Agriculture Minister, but had not yet received a response.

The CEO of the NFF added that the losses were mind-boggling and could run into billions of dollars for wheat.  This could have an adverse effect on farmers.

The Grain Trade Australia (GTA) CEO had said that the three consecutive massive harvests over the past three years had placed strain on the supply chain and, in turn, prices. In response this time, the GTA stated that it was “impossible to comment”.

The Buloke Times 14 April 2023

This article appeared in The Buloke Times, 14 April 2023.

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