Day 8 - Global Grain Asia Conference

We've hit the Global Grain Asia conference and joined our CBH colleagues Tom Puddy, Head of Marketing and James Foulsham and Stephen Moyle from the Trading team. It's great to catch up with many of our customers and the trade. Today's blog is from Brian McAlpine, our Grower Director on the trip from Latham.............

Well respected analyst Emily French, ConsoliAgra concluded in her presentation that neutral weather conditions globally will result in a sustained bearish wheat market. Wheat will have feed demand taken away from it from increasing corn production. Global grain stocks across all soft commodities currently are not causing any concern.

Indian wheat production has increased to 93 million tonnes resulting in 8 million tonnes being exported. All export is still put through manual labour. SE Asian flour mills are starting to use small amounts with quality issues being slowly understood.

It was great to meet the Interflour procurement team member Ben Gliddon, Pricing Manager, who explained what process and challenges presented to them to be able to supply the six Interflour flour mills. Grain is purchased mainly on basis and converted to a fixed position closer to execution. With some of our flour mills only being able to handle the smaller handymax vessels provides freight challenges. The team use advice from the Intergrain R & D centre headed by Dr Nas with reports on quality and value.

Talking to delegates from the conference it has come across that CBH has an envious position with its market share of the West Australian grains industry. The low fobbing costs in WA as compared to Eastern Australia was noted in a panel discussion but was also noted that Australia has on average an expensive fobbing cost as compared to other markets. CBH platinum sponsorship of the conference indicates that we are a serious player and are well positioned into the future to capture growth potential.


A new port and grain facility based in Vladivostok in Eastern peninsula of Russia will be commissioned by 2015. This will open up significant freight advantage for the Siberia wheat growing region into the Asian market. The Siberian market produces 3.9mmt annually and would pose a competitive threat. Also the widening of the Panama Canal will increase opportunity for Brazil to supply soybean to Asia if they can improve infrastructure in the North.

Global quantitative easing has created a flood of money but may not be the solution for Western world markets. Agriculture land will be a beneficiary of institutional money as they look for hard assets providing an inflation hedge.