The CBH Group has signed a deal to ship 30,000 tonnes of malting barley to Heineken Mexico as quotas previously sent to China quickly being filled
Australian barley is heading to a significant new market after the nation’s biggest grains exporter, CBH Group, signed a deal to ship 30,000 tonnes of malting barley to Heineken Mexico.
CBH Group is proving to be one of the strongest performers in marketing grain and in its 2020 Annual Report the Group reported a surplus and net profit after tax of $11 million for the year.
This was despite holding supply chain fees flat after being reduced by $4 per tonne in 2018-19, and experiencing challenging external factors including a below-average harvest, international trade tensions and the COVID-19 pandemic.
CBH Chief Executive Officer Jimmy Wilson said the Group result was a good outcome given the headwinds experienced across the business.
“We responded quickly to the challenges presented through the year to keep the supply chain operating, developed new and existing markets for Western Australian grain, and continued to return value to our growers,” Mr Wilson said.
“We also invested $226 million in developing and improving the network, completing three expansion projects at Konnongorring, Moora and Watheroo, approximately 200 sustaining capital projects and a large maintenance program.”
“In addition to improving site cycle times, our aim was to meet growers’ site service expectations which we did through the offering of 51 grades across 114 sites, with improved on-site, online and technical services,” he said.
Marketing and Trading recorded a net profit of $12.2 million, representing a strong recovery from its 2019 financial year position. With 40 per cent market share of Australian bulk grain exports, the division maintained its status as Australia’s largest grain exporter.
Mr Wilson said the result was significant given global market factors during the year.
“The conclusion of the China anti-dumping investigation into Australian barley resulted in the unfortunate loss of our largest barley market, and the team has worked hard to find new markets for Western Australian barley,” he said.
Moving forward, it is expected that Mexico will be a great market for Australian malting barley growers moving forward.
Local grain growers should all be doing a Mexican wave for the thorough work that the CBH Group has put in to find markets to replace the grain that was previously almost exclusive to China.
Mexico has a population of 127 million people, and a strong appetite for the kind of
high-quality food and beverages that Australian farmers produce.
Latin America presents considerable and exciting opportunities for Australian grains, meat and produce.
The CBH Group deal in Mexico is great news for Australian grain growers and it highlights that many nations worldwide are aware of our top quality produce, and are pleased to have a chance to get regular supply.
Many local farmers and businesses are also set to benefit from better export opportunities with the signing of the Regional Comprehensive Economic Partnership (RCEP) Agreement between Australia and 14 other Indo-Pacific countries.
With one in five Australian jobs reliant on trade, the RCEP Agreement will be crucial as Australia and the region begin to rebuild from the COVID-19 pandemic.
Minister for Trade, Tourism and Investment Dan Tehan said the Government is helping Australian producers break into new export markets to support jobs and growth at home and drive the nation’s economic recovery.
“Trade creates jobs and the more diversified our markets are the more jobs we create,”
Mr Tehan said.
“Austrade worked closely with CBH Group to fast-track its expansion into Latin America with market intelligence and local contacts.
“Austrade continues to work with CBH Group and other Australian businesses to open new markets and new exporting opportunities.
“I encourage Australian businesses to look at the Austrade website and contact Austrade to better understand how our Government can support them to reach new markets.
“WA co-operative CBH Group is to be applauded for its rapid response in developing a new potential market in Mexico, with its first shipment of malt barley to the country.” Mr Tehan concluded.
The 2020 CBA Annual Report is available on the CBH website
More export markets to open
Australian agricultural exporters are expected to diversify their market footprint in 2021 with the $72 million Agri-Business Expansion Initiative, in particular that will provide scaled-up support services for more than 2,000 agri-food exporters and extra technical experts to expand market access.