A LACK of shipping capacity on the east coast combined with the availabilty of shipping slots in South Australia has seen huge volumes of grain flowing from Victoria and NSW into South Australian ports for export.
Chris Heinjus, Pinion Advisory commodity risk manager, said it was economic to move grain into the various port facilities in Adelaide and even further to the west to ports on the Yorke and Eyre Peninsulas.
"We've been seeing this happen for quite some time, there has been a very strong flow of grain in from Victoria and NSW as exporters make use of available slots at South Australian ports," Mr Heinjus said.
He said farmers were getting a premium for sending grain west from areas as far as West Wyalong in Central West NSW, while in the south product from the eastern Wimmera, traditionally sent out via one of the three Victorian grain ports, is also making its way up the Dukes Highway.
In far western Victoria, Kaniva farmer Malcolm Eastwood backed up Mr Heinjus' comments.
"At harvest there was some grain delivered into bulk handling sites such as Wolseley, just over the SA border, but post-harvest it has really geared up and I'd say 90 per cent of the grain is moving into Adelaide," Mr Eastwood said.
He said the trend was across all crops.
"We're seeing it in cereals, pulses, canola, anything where it is going to be exported rather than used domestically, the best prices have been for delivery into Adelaide," he said.
"A lot of the pulses in this area are often sent to Horsham for packing but this year they have been sent directly to Adelaide as the price has been better."
Jonathan Dyer, also at Kaniva, said his farm business stored grain on-farm rather than in the bulk system.
He said the vast majority had headed over the SA border.
"Some canola went to Melbourne, for domestic use at the crusher in West Footscray, but anything for export the prices have been far better in South Australia."
Mr Heinjus said the phenomenon was caused by the lack of shipping space on the east coast.
"We've seen really big harvests in Victoria and NSW, we've seen disruptions to the supply chains in the Port Kembla zone with rail being out of action due to derailments," he said.
"It has all meant shipping capacity is really hard to come by, whereas with the various different ports and a more average year of production there is more room in SA and that is where the exporters have been looking and prices reflect that."
Mr Heinjus said the major pocket of NSW looking towards South Australia were the northern Riverina and parts of the Central West.
"Towards West Wyalong, Lake Cargelligo, places like that, they traditionally have an export focus, but this year there has been difficulties getting slots at Port Kembla, further compounded by the harvest rain causing crop downgrades, meaning there are a lot of different qualities around.
"There has been a lot of special feed wheat from that areas that has made its way to South Australia for export.
"Further to the south through the central Riverina, around Wagga, there is a strong focus on the domestic market and a lot of the grain will be soaked up there, but for those guys that traditionally sell into export markets, the South Australian option has been really strong for them this season."
"The grain is virtually all destined for the export market."
In Victoria, he said farmers were looking at the opportunities either in taking grain directly to Adelaide or taking it to Adelaide-focused bulk storage sites.
"The premiums for delivering grain into Adelaide more than make up for additional freight costs across a large part of western Victoria."
Mr Heinjus said the trend was likely to continue for the upcoming harvest and possibly into the 2023-24 season, but he said as more capacity became available on the east coast grain catchment zones may return to more traditional patterns.
"You can check the prices, the incentive is still firmly there to send grain to South Australia for the new crop and even out for the next year, although there is very little trade being done on that contract, but as capacity becomes available on the east coast we'll see prices reflect that."
He said there had been a number of options for exporters, including smaller bulk consignments at smaller ports, taking individual ship holds of around 8000 tonnes.
"That has been popular given issues with the container market in terms of both availability and pricing of containers, there is also good flexibility with putting together parcels of downgraded grain."