ADELAIDE, AUSTRALIA — A draft determination from the Australian Competition and Consumer Commission (ACCC) exempting Patrick Stevedoring’s Berth 29 facility at Port Adelaide, Australia, moves Cargill a step closer to competing with Viterra in South Australia.

Patrick, which recently entered into an agreement with Cargill to stevedore grain at the berth, expects to load 225,000 tonnes of grain per year for Cargill, which equates to 8-10 ships a year.

The vessels will be loaded using Patrick labor, Cargill’s hopper and Patrick’s ship loader. Cargill will source grain from both its own GrainFlow storage network and the Viterra storage network. Access to the Patrick facility should provide additional shipping options for Cargill, including the possibility of two port loadings, the ACCC said.

Prior to Patrick starting its operations at the port, Viterra was the only provider of bulk wheat port terminal services in South Australia, the ACCC said.

The Patrick/Cargill arrangement may increase competition in the related grain trading and grain storage markets, the ACCC said. Growers situated within proximity to relevant Cargill sites may secure more attractive prices than other growers who can only access a Viterra upcountry storage facility, the agency said.

However, Viterra will remain the dominant operator in upcountry storage and handling across South Australia. Patrick’s expected load of 225,000 tonnes only represents 3.5% of the average annual grain production from the area. Viterra will handle about 97% of the South Australian grain port throughput.

In issuing the draft determination, the ACCC said its preliminary view is that Patrick will face sufficient competitive constraint to warrant granting the exemption. The ACCC said the Patrick operation should promote competition in a market (and related markets) where Viterra is dominant.

“There is currently little competition in upstream markets, granting an exemption to Patrick may promote competition in both grain trading and/or grain storage particularly where Cargill operate storage facilities,” the agency said in its draft determination.

The ACCC invites submissions from interested parties on its draft determination. The closing date for submissions is March 10.

The code, which commenced on Sept. 30, 2014, regulates bulk wheat port terminal service providers to ensure that exporters have fair and transparent access to terminal facilities. Where appropriate, the ACCC may reduce regulation at a specific port terminal by exempting the relevant port terminal service provider from certain provisions of the code.