A battle is brewing over the operation of the State Government’s Grain Licensing Authority.
A battle is brewing over the operation of the State Government’s Grain Licensing Authority.
Central to the issue is the recent sale of about 23,000 tonnes of Western Australian canola to four Pakistani canola crushers at a lower price than that offered by the state’s single desk monopoly grain seller Grain Pool of WA.
It is understood Melbourne-based grains trader Louis Dreyfus Australia sold the canola to the Pakistani buyers.
Grain Pool senior trader Josh Roberts said the undercutting of Grain Pool’s price was contrary to the purpose of the formation of the GLA, which was to bring better returns to growers.
GLA chairman Colin Mann said the authority had investigated the situation and believed the granting of special export licences to the Pakistani market to be within the legislation and ministerial guidelines.
A Louis Dreyfus spokesman refused to confirm or deny whether the company was involved.
“Louis Dreyfus does not comment on any commercial activities that we may or may not be involved with,” he said.
The Grain Pool of WA has a single desk monopoly on the sale of bulk canola, barley and lupins. However, under changes to grain marketing laws, the GLA can issue special export licences to other traders to sell bulk grains.
In this case it appears the canola was being sold by AWB Limited, which holds a special exporter’s licence.
AWB state manager Paul Ryan said the company had been looking to sell about 38,000 tonnes of WA canola into Pakistan but that deal had fallen over.
“We sold that tonnage into the domestic market,” he said.
“Louis Dreyfus might have bought some of that grain.”
Mr Roberts said the Grain Pool had been trying to sell WA canola for $312 a tonne to four Pakistani crushers.
“They had a bid on the table of $308 a tonne,” he said.
“Then Louis Dreyfus came in and sold to them at $295 a tonne.
“That’s what makes it totally outrageous. It’s a classic example of how the decision of the GLA to grant them an export licence undercuts the single desk.”
Mr Roberts said he believed the Pakistani sale showed a flaw in the GLA’s operation.
“The idea is to create more competition and get better prices for growers. But in this case we have one agent buying from another agent and not from growers,” he said.
Mr Mann said that, according to the GLA’s investigation, grain exporters had not contravened the conditions of the export licences.
“Evidence shows that an exporter did enter into negotiations in the very large and competitive Pakistan market with their own customers who may have also dealt with Grain Pool or a Grain Pool representative at some time in the past,” he said.
“However, the Grain Pool does not have exclusivity in any market unless a price premium can clearly be shown, or shown to be affected to a significant extent.”
Mr Mann said one of the GLA’s conditions of sale to Pakistan was that any canola sold into that market would replace grain from another source, not WA canola from the Grain Pool.
