GRAIN traders say the new Viterra auction system is fraught with problems, writes PETER HEMPHILL
Viterra plans to hold three auctions for grain traders to book shipping slots for ship loading at its six South Australian ports.
The auctions are part of a new system for export of grain developed by Viterra as part of its port terminal access undertakings to the Australian Competition and Consumer Commission.
But grain traders believe the auction system proposed by Viterra has its problems.
They believe the submitted proposal is a "stop gap" measure designed to meet the ACCC's deadline on port access undertakings and hope Viterra will eventually fine-tune the system.
Australian Grain Exporters Association president Chris Aucote said booking systems for shipping slots was relatively new to the industry.
Mr Aucote said this was only the fourth harvest since wheat export market deregulation and booking shipping slots at port terminals was "continuing to evolve".
Mr Aucote said CBH in Western Australia had an auction system for three years but problems remained.
The AGEA would use the experience in WA as the basis for some of its submission to the ACCC on Viterra's proposal.
"We hope to adjust the Viterra system," Mr Aucote said.
Booking shipping slots around Australia has been a controversial issue since deregulation of the wheat industry.
Federal authorities have recognised that bulk handlers with port terminals have regional monopolies which, if left unregulated, could see anti-competitive activity limit exports.
Bulk handlers have been required to develop voluntary arrangements to allow fair access to ship loading capacity.
Viterra's grain executive manager Dean McQueen said feedback from the industry had guided development of its proposed auction system.
"We have been cognisant of the need to meet the ACCC requirements while at the same time delivering a system that will work commercially," Mr McQueen said.
Last year, more than 8.4 million tonnes of grain was exported through South Australia's ports - a record for the state.
But one trader, who did not want to be named, said record exports should not necessarily be interpreted as a system working efficiently.
He said there were extraordinarily large numbers of demurrage payments to ship owners because Viterra could not load vessels on time.
Under Viterra's proposed auction system, grain traders can bid for ship loading tonnages in 14-16 day shipping slots, representing the first or second half of any month.
A single auction for ship loading during the harvest period - October 1 to January 31 - will be held each August.
There will be two auctions for the non-harvest period which will be held four weeks apart during November-December.
Viterra said holding later auctions for the February to September non-harvest period would allow grain traders to assess crop size and their requirements prior to bidding.
Former Elders Toepfer Grain managing director Mark Thiele criticised Viterra last February for allowing 4.5 million tonnes of shipping capacity to be booked for the 2011-12 export season without a single seed being planted.
Traders relinquishing bookings just prior to ship loading also attracted criticism for making it impossible for other exporters to take up available slots in a tight loading program.