Australia: ABB Grain announces malt barley pool estimate (WA)

ASX-listed ABB Grain has announced on November 18 the Gross Pool Indicator for its WA malt barley pools at $210 FOB with no tonnage restrictions.

WA grain accumulation manager Anthony Fitzgerald said there was no restriction on the percentage of crop that growers can deliver to the pools.

“Grain can be delivered by nominating the pools on the Carters Delivery Form at delivery or transferring from warehouse,” Mr Fitzgerald said.

The pools are a result of extensive consultation with growers and aim to capture domestic market benefits for participants. Gairdner (grades malt 1 and malt 2) and Baudin and Hamelin (malt 1 grade) will be accepted at sites in the Kwinana and northern half of the Albany zones.

Pool returns will be generated from a malt sales program that will include Joe White Maltings, ABB’s wholly owned subsidiary, which is part of ABB’s integrated agribusiness strategy.

Joe White Maltings is Australia’s largest malt producer and the eighth largest in the world. The company’s Forrestfield plant is currently undergoing a $40 million upgrade designed to double malt production to 200,000 tonnes per year. Growers stand to benefit from this expansion because processed malt will penetrate new markets.

“Other than a grade spread between malt 1 and malt 2 grades there will be no quality discounts,” Mr Fitzgerald said.

“This flat price structure, which ABB introduced to the WA cash market for malt last year, has proved very popular with growers.

“As with most pools, the ABB Pool is subject to closure without notice but growers can always contract in to our pools, which protects growers that may be harvesting late in the season.”

Growers will have a choice of payments, through the ABB Traditional Pool, which maximises short-term cash flow, or the ABB Extended Pool, which provides taxable income management advantages in line with ABB’s barley pools on the eastern seaboard.

The ABB Traditional Pool will pay a harvest advance calculated on the formula: FOB x 70% - (80% of estimated domestic handling costs) – (100% of estimated freight from upcountry site). For example the FOB pool estimate is $210 and growers delivering to Avon, Wagin, and Narembeen will receive a (GST exclusive) harvest payment of $122.51, $114.71 and $111.08.

The ABB Extended Pool will distribute payments on a quarterly basis. If cash flow is required in the meantime growers can borrow against their equity to the same level as participants in the Traditional Pool. Examples of (GST exclusive) Estimated Silo Returns for the Extended Pool at Avon, Wagin, and Narembeen are $180.31, $172.51 and $168.68.

ABB is offering growers the option of delivering Gairdner Malt 2 against contracts, into the pool, and on the cash boards at CBH sites where the segregation is available.

“ABB Grain is Australia’s largest and most experienced marketer and processor of malt barley. With 65 years experience our team is excited about the opportunity to provide these marketing options to WA growers,” Mr Fitzgerald said.

ABB is an ASX- listed company with capitalisation of approximately $1 billion.

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