AGRIBUSINESS

CBH announces supply chain fee price hike

CBH GROUP is increasing grower receival fees and exporters port terminal shipping fees by $1.10 per tonne each, a total increase of $2.20/tonne.

Staff writer
 CBH announces increase in supply chain fee's.

CBH announces increase in supply chain fee's.

The increased supply chain fee is to counter rising inflation and bankroll its capital network upgrades.

CBH announced the news in an email to its 3900 grower members last week, saying the total $2.20 per tonne increase in supply chain fees would help elevate investment in the network.

CBH recently revealed to growers it had developed a new strategy with a target of being able to receive an average 22 million tonne crop and out-turn 70 per cent in the first half of the year by 2033.

To do so, it plans to spend $250 million per year for five years to upgrade its supply chain infrastructure.

In the email, CBH explained that supply chain fees were set according to capital investment, the expected tonnes delivered by growers in the upcoming harvest, and the operating cost structure.

CBH chief operations officer Mick Daw said CBH, Australia's biggest grain exporter, wanted to be able to export three million tonnes of grain from its Western Australian ports per month by 2033, up on the current 1.6 million tonne capacity.

"It's about funding capital projects and making sure we're in a position to continue to make good investments to increase the performances," Daw said.

Charges vary according to grain type, but the increase brings these to $31.60/t for wheat, up from $29.40/t last harvest.

The move means the grain receival fee for 2022-23 for wheat will be $11.35/t, which is paid for by the grower. The marketers will pay the shipping fee which will be $20.25 per tonne.

CBH's goal to be able to export 3 million tonne per month by 2033 comes as the size of the WA harvest continues to grow, with 21.3 million tonne of WA's record 24 million tonne delivered to CBH last harvest.

"Being able to export 3 million tonne per month by 2033 would generate price value for growers, both current and future, by shipping more grain during the first half of the year, before the northern hemisphere crop is available to grain-buyers and prices for Australian grain are higher," Daw said.

CBH has spent more than $1 billion on its network during the past six years, adding 2.8 million tonnes of permanent storage and more than 80 throughput enhancement projects, and more than 400 sustaining capital projects.

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