THE AUSTRALIAN grain industry is in the midst of one of its slowest sales period in years, with growers unwilling to sell remaining unpriced grain at current values.
Slow export sales, reflected on shipping stems at ports across the country and sluggish demand from domestic markets has meant little grain is changing hands at present, in spite of there still being reasonable tonnes of the old crop to be sold.
Dan Cooper, chairman of the NSW Farmers Association grains committee, described the situation as a ‘Mexican standoff’.
“There’s a fair bit of unpriced grain, but farmers are unwilling to sell at current values and marketers are unwilling to raise their bids,” he said.
“It’s now just a matter of seeing who blinks first.”
Mr Cooper said Australia’s grain prices at present were largely uncompetitive on the international stage, with a strong basis meaning values are above worldwide parity.
“We’re basically priced out of the export market, so that means we are relying on the domestic market to take the majority of the remaining old crop.”
Grain Producers Australia (GPA) chairman Andrew Weidemann agreed that farmers were holding tight to remaining stocks.
“Nobody is keen on selling on the price, so people are waiting for some sort of a price rally.”
However, he said he did not think there was a lot of grain remaining to be sold.
“There might be some grain still on-farms, but I would say that is often committed to farmers’ own livestock needs, and I don’t necessarily think there’s a lot in the bulk system, at least here in Victoria.”
Lloyd George, analyst and owner of AgScientia, said grain exports were slow, even out of the export dominant states, South Australia and Western Australia.
“Even when there are some sales, they are generally to the locations we have strong freight advantages, we are struggling to get much reach.”
Mr George said the container trade was accounting for some grain, but had slowed down rapidly.
“There is still some value adding in the container trade, but it is quiet.”
He agreed farmers were not willing sellers at present values.
“Without a true break as yet through the east coast, some farmers are thinking if they have held their grain this long they may hold on a little longer as a drought hedge or to market if there is rain, but it comes too late to stimulate late autumn / early winter feed.”
Mr George said farmers were having more trouble moving winter crop because northern markets have more access to sorghum than in recent years.
“That fierce demand from China that has characterised the past couple of seasons just isn’t there.”
In South Australia, Grain Producers South Australia (GPSA) chief executive Darren Arney said there was more unsold grain than at this time last year.
“Some guys have needed to make sales for cash flow reasons, but if not, they don’t like the low prices and are waiting for a rise in the market.”