Grain markets and reporting

Oct 28, 2016

The issue

Grain producers need access to more information around grain in storage to be able to make informed on-farm decisions about sowing and marketing strategies. Releasing stocks information provides all participants with a level playing field so all know where stock is, allowing the market to function more effectively with transparency and knowledge. In addition, pool providers are exempted from complying with Australian Financial Services Licencing provisions, managed by the Australian Securities and Investments Commission,  because they are not deemed to be a managed fund.

The solution

With regard to stocks transparency, GPSA would like information available on an aggregated basis so no trader’s individual position is disclosed. We believe this is important for the grain market to function, just as the share market does with disclosure of financial information. Information is needed by grade on a weekly basis.

Consultation is underway at a national level on the exemption of pools under the ASIC regulations and GPSA will make a submission as part of this process. GPSA believes that significant value is put into pools where grain sales and payments are managed on behalf of growers and as a result, they should be considered as a managed fund. GPSA wants to make sure growers are getting value for money and are not at risk of inappropriate forecasts or marketing strategies that erode their capital position. As a result, pool providers need to be transparent in their forecasting and operation. While there is the potential for market premiums in pooling grain together in certain markets, the potential losses would be more than the regulatory costs that would be incurred.

All policy points