A RECORD grain harvest between 2020 and 2021 has exposed issues with the regulation of grain ports, according to the Australian Competition and Consumer Commission.
The ACCC published its Bulk grain ports monitoring report – industry update today (8 September), summarising the views of Australia’s bulk grain export industry in the wake of the 2020-21 shipping year, which was a record year.
The latest report complements the Bulk grain ports monitoring report – data update released in December last year.
The ACCC said consultation with the bulk grain export industry has shown that grower representative groups and some exporters generally support regulation of bulk grain export supply chains, but port terminal operators largely do not.
It said grain exporters are, however, concerned about a perceived lack of transparency in the way port operators allocate capacity to them.
A key issue the ACCC consulted on was the suitability of the Port Terminal Access (Bulk Wheat) Code of Conduct, the regulation intended to ensure bulk wheat exporters have fair and transparent access to port terminal services.
“The bulk grain export industry has undergone some significant changes over the last five years, so we need to consider whether the current regulation of exporter access to port terminals is still fit for purpose,” ACCC deputy chair Mick Keogh said.
“In recent years we’ve seen an increase in the number of port terminal service providers, a higher percentage of non-wheat grain bulk exports, and at some ports, an increased market share of grain shipments by exporters associated with companies that operate the port terminal facilities,” he said.
“While the grains industry has mixed views about the effectiveness of the current code, it’s clear it isn’t working optimally and a review is needed.
“The ACCC is especially mindful of the regulatory burden the code imposes on new port terminals.”
The Australian government first reviewed the code in 2017 and is currently required to commence a second review this year, according to the ACCC.
The ACCC said it believes government and industry would benefit from a detailed review that considers whether the current regulatory approach is fit for purpose and what changes are needed.
Port terminal service providers reportedly told ACCC they experienced unprecedented demand for capacity, consistent with the record year for bulk grain exports.
“The massive harvest in season 2020-21 resulted in the largest ever volume of bulk grain exports, so it was a good test of both port capacity and the impact of reduced regulation in these markets over the last few years,” Mr Keogh said.
Several exporters reportedly raised concerns about access to port terminal facilities in 2020-21, and some smaller exporters said capacity constraints at established port facilities forced them to seek access at new ones or rely on mobile ship loaders.
However, some exporters reportedly told the ACCC that mobile loader operations were not perfect substitutes for fixed loader operations, and they questioned their value outside of high-demand years when capacity at larger facilities is constrained.
The ACCC’s bulk grain ports monitoring reports are produced annually as part of the commission’s stated monitoring role on the effect of further deregulation of the industry and greater competition that has emerged between some port terminals.
Preparing the latest report, the ACCC said it consulted with industry about access of port terminal capacity, transparency of shipping data, the impact of the Bulk Wheat Code of Conduct, and the ability of businesses to access stored grain and transport it to ports.
