Australia’s competition regulator has halted a proposal by grain handler Viterra to auction port capacity after similar auctions in other parts of the country have exposed problems allocating capacity despite a bumper harvest.
Viterra, Canada’s largest grain handler, has been working on plans to introduce an auction system to allocate port terminal capacity in South Australia from May this year.
The Australian Competition and Consumer Commission, which said it would give more time to consider potential modifications to the proposal, noted that auction systems had not resolved some export issues in Western Australia.
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“Recent auctions in Western Australia have highlighted a number of problems with the operation of the system. Large volumes of capacity have not been allocated through auction, despite the record-breaking crop harvested this season,” the ACCC said in a statement.
Australia, the world’s fourth-largest exporter of wheat and major producer of barley, sugar and canola, deregulated its grains industry in 2008.
Some growers and traders have complained that bulk grains companies such as Viterra and locally listed GrainCorp. wield too much control over the allocation of export facilities.
Viterra officials could not immediately be reached for comment.
The ACCC statement came a day ahead of the publication of a report by a Senate Committee on grain export networks, with several industry groups pushing for the introduction of transparent auction systems to allocate access to port terminals.
Auction systems are likely to be a key element of the findings of the Senate’s Rural and Regional Affairs and Transport References Committee.
Viterra, which is the target of a $6.2-billion takeover bid from Swiss-based commodities giant Glencore Ltd., has a monopoly on South Australia grain export facilities.
