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DELAYS in moving grain to port in Victoria caused by industrial action will have a negative impact on growers in terms of missed marketing opportunities, according to the state’s peak farmer body.
Steve Sheridan, Victorian Farmers Federation grains group manager, said while the immediate economic impact would be felt by bulk handlers and exporters incurring additional costs as a result of grain not being moved to port, down the track the problems will hurt growers.
“We see exporters looking to now execute shipments originally planned out of Victorian ports out of interstate facilities, you’d have to think there is the possibility of marketers looking at other options due to the perceived risk in Victoria,” he said.
“It would not surprise if we saw a regional discount in prices for old crop emerge here in Victoria as a result as marketers looked to ensure they do not incur port demurrage fees.”
Mr Sheridan said even though train drivers had agreed to return to work and Pacific National was committed to returning scheduled grain movements to schedule, the lost capacity would be difficult to make up.
“Given the season, where the supply chain was virtually booked out anyway due to the big harvest, you can’t just remove 160,000 tonnes of rail capacity and expect to catch up.”
He said with planned rail upgrades as part of the Murray Basin Rail Project time was at a premium. “The last thing we want is for growers to have warehoused grain in upcountry sites with their only option moving it by road, which is more expensive and time consuming,” he said.
“You’d then see a situation where growers will wear the cost of storage fees and the finance.
“There are the immediate costs to the exporters with ships waiting to be loaded in terms of demurrage, but the industry also needs to look at the knock-on costs as well as the headline figure.”
Mr Sheridan said it was disappointing Pacific National and its drivers were at war at such a critical time.
“It really hurts, as all the dispute is doing is making the grain rail freight sector uncompetitive,” he said.
This article first appeared on www.bordermail.com.au
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