WEST PERTH, AUSTRALIA — The CBH Group said on Sept. 8 that it has withdrawn its proposal to the Australian Competition and Consumer Commission (ACCC) for the proposed allocation of port capacity through long-term agreements (LTA) with exporters.
Despite marketers representing 93% of the market volume accepting capacity offered through the LTA process, there has been feedback to the ACCC from others who do not like the LTA allocation process and were not satisfied, because they would not receive all of their requested LTA capacity.
CBH has been through a process of review and has made this decision on a pragmatic basis given current regulation to provide certainty to exporters and growers.
CBH Operations General Manager David Capper said CBH is disappointed that a process that has seen extensive consultation all year has been unable to deliver a workable solution at this point.
“We are getting some conflicting messages from the market. With this in mind we’ve had to reconsider the system to make sure that we have capacity allocated for the coming harvest,” Capper said. “With harvest approaching quickly, we weren’t confident that this would be resolved in time to offer capacity for the 2014-15 harvest, so we have withdrawn the LTA proposal at this stage.
“Current regulation is hindering us in progressing with workable LTAs. This is an illustration of why it’s important to adopt a mandatory code which has sufficient flexibility so that CBH can best manage an efficient grain export task that will benefit WA growers, CBH customers and WA as a whole. It is vital to allow the industry to keep moving forward.”
CBH will seek an extension to the current access undertaking and will hold a capacity auction in mid-September.
“This is not our ideal situation as we still believe that the LTA system is in the best interests of WA growers. Given the situation we are taking more time to consider how that will work into the future,” said Capper. “This move will ensure that WA grain from the coming harvest can reach customers. Any decision we make on this issue will be with WA grower’s interests at heart.”