01/10/2008 - 22:00

Grain leads agriculture drive

01/10/2008 - 22:00

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THE resources sector may generate the lion's share of the state's export revenue, but the agricultural industry is also creating significant revenues, particularly grain exports.

Grain leads agriculture drive

THE resources sector may generate the lion's share of the state's export revenue, but the agricultural industry is also creating significant revenues, particularly grain exports.

Grain remained the state's top agricultural export commodity, with CBH Group subsidiary, Grain Pool, recording $1.4 billion in export revenue for 2007-08.

Grain Pool exported about 4 million tonnes of grain to its key markets in the Middle East and its South-East Asian flour mills.

The WA wheat harvest was a slight improvement on the 2006-07 season at about 6.1mt, which is still below average for the country's biggest wheat producing state.

But growers and exporters benefited from a spike in world wheat prices on the back of global concerns that world supply would not satisfy demand.

The world wheat indicator price averaged around $US362 a tonne in 2007-08, while the pool return for Australian Premium White wheat averaged around $A418/t.

The higher prices were able to offset the smaller tonnage received by former wheat export monopoly holder AWB, which recorded export revenues of about $1 billion from WA, similar to the previous year.

The latest forecasts for the 2008-09 WA grain harvest is between 9mt and 11mt, signalling a return to average harvest levels.

The Australian Bureau of Agricultural and Resource Economics predicts that world wheat prices will decline but remain relatively high in historic terms in 2008-09.

This coming season will throw open a whole new playing field for bulk wheat exports from WA, as the industry experiences its first deregulated market in more than 70 years.

Grain Pool was among the first companies in Australia to be accredited to export wheat in bulk, joining other accredited companies including AWB, Cargill Australia and Goodman Fielder.

Grain Pool general manager Brian Mumme told WA Business News the cooperative anticipated an increase in receivals this harvest as a result of the full deregulation.

He said the fact that Grain Pool was only last grower-owned company in grain marketing would work in its favour, particularly in WA.

For growers, a degree of uncertainty still surrounds how the deregulated market will play out.

Mr Mumme believes communication to growers on what the cooperative had to offer compared with its competitors was key.

"The key is to link the grower to the customer and leverage our investment in the flour mills and give growers long term sustainable markets going forward," he said.

Live sheep exports also made a strong contribution to the state's agricultural exports. Wellard Rural Exports, Australia's largest livestock exporter, recorded export revenues of $239 million.

Emanuel Exports also performed strongly, with $255 million in exports for the year.

WA Meat Exporters reported export revenues similar to last year of $75 million, while Harvey Industries, in its first full year out of administration, reported revenues of $125 million.

Lamb exporter WA Meat Marketing Cooperative recorded a slight increase in revenues at $89 million.

In reporting its annual results the cooperative said producer margins were under pressure for a second consecutive year as poor seasons in many areas of WA, coupled with steep increases in cost, especially for feed grains, affected many growers.

Also of concern is the decline in the size of the WA sheep flock, which has reached its lowest level since the early 1920s.

The state's largest western rock lobster exporter, Geraldton Fishermen's Cooperative, recorded a strong increase in export revenue to $169 million.

Its acquisition of the assets of competitor Westar Lobster last year, which put the cooperative in control of almost 65 per cent of the state's $300 million rock lobster industry, contributed to the result.

But the industry could be facing the possibility of a decline in rock lobster stocks in the years to come, after recent surveys found significantly diminished stocks of larval-stage lobsters.

Woodchip exporters also performed strongly, with industry leader, WA Plantation Resources, recording $95 million in export revenues.

Hansol PI generated $35m for 2007-08 financial year, but chief executive Gary Inions said the company would effectively be doubling the size of the business by the end of 2009.

While the company has been exporting woodchips to Japan since 2004, it will ramp up to full production from January 2009 onwards, as its trees reach maturity.

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