Australian Export Grains Innovation Centre
AEGIC

Supply chain costs impact global competitiveness

Often comprising up to 30% of the cost of grain production, improving handling efficiency and lowering per tonne supply chain costs are key to remaining internationally competitive.

AEGIC is currently carrying out an analysis of Australia’s bulk grain export supply chain. The Report outlines the supply chain costs for producers in each State when exporting through a bulk handler. The Report is due for public release during late January 2014.

As a net exporter of grain, Australia’s costs of production need to remain internationally competitive for the industry as a whole to be profitable.  This means improving efficiency and lowering per tonne production costs at least as quickly as other exporting nations.

With the supply chain costs accounting for about 25–30% of the cost of grain production, it is imperative the industry strives to lower this cost in an ever-increasingly competitive global market.

Supply chain costs, from receival site to port, for a wheat producer 200km from port in western or eastern Australia start at about $60/t. This equates to about 20–25% of the price of wheat or for a crop yielding 2 t/ha and is equivalent to $120–145/ha.

Bulk handling charges, including receival charges, freight and port fees, make up the vast majority of this cost at $52-65/t and are generally a grain producer’s largest single cost item. End-point royalties and levies make up the remainder. 

The Report will be released on 30 January 2014, available on the AEGIC website or by contacting communications@aegic.org.au.

 


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