ABC Premium News (Australia)
Western Australia should invest more in grain processing to safeguard national supply and make the most of Asian exportmarkets, according to an industry leader.
Grain Industry Association of Western Australia chair Jon Slee says WA should take advantage of its export surplus and focus on creating finished products such as flour and oats through grain processing.
Mr Slee says the development of grain processing facilities in the state could strengthen the domestic supply of grain.
He says centralisation of processing to the eastern states has left Australian grain too vulnerable to drought.
This year's drought in parts of eastern Australia led to a significant drop in profits for grain handler GrainCorp.
GrainCorp reported a net profit drop of $50 million, or 43 per cent, in its half yearly report this year.
Mr Slee says the demand for product in the eastern domestic market is very close to its supply level.
"[If] they have a drought situation in New South Wales and they get to a situation where they have to import wheat or canola for processing, then they are not competitive," he says.
Mr Slee says WA could negate potential vulnerability in eastern states.
But he says a focus on grain processing in WA would create a more secure export supply chain into Asia.
He says free trade deals with Japan and Korea have freed up tariffs on 'finished product' material exports.
On a recent trip to China the Minister for Regional Development and Lands Terry Redmond said there was interest in developing a flour mill in Western Australia.