Australia's CBH sees grains port capacity fully booked until Sept 2023: sources

Australia's grain merchant and port terminal operator CBH saw all the slots of its available spare capacity for the Western Australia ports for 2022-23 (October-September) filled within minutes of opening up, market sources said June 30.

CBH ports have a total loading capacity of 16.2 million mt across four ports of Kwinana, Esperance, Albany and Geraldton for the 2022-23 season, according to a document released by CBH on the capacity allocation dated May 1. Of the total loading capacity, 10.3 million mt of capacity was allocated to CBH internally and other exporters through long-term agreements, leaving a total of 5.9 million mt of capacity being released as spare capacity available for grain marketers and exporters to book.

CBH could not be reached immediately to get the response for the slots' allocations. CBH released its spare capacity for the Western Australia ports for 2022-23 on first-in-first-serve basis June 30.

This comes at a time when another year of tight port logistics is expected, with market participants estimating more than 20 million mt of exportable wheat surplus including carry-in from Western Australia. Port capacity is seen as the bottleneck for global grain trades during good harvest years in Western Australia, according to sources.

However, it did not come as a surprise to market participants, amid the uncertainty of wheat supply out of the Black Sea in the next season. "This strategy worked well last year," said a Singapore-based grains trader. "Whoever has the port slots will be able to sell," added another trader.

However, some participants highlighted the risk of forward selling too early as the new crop has just started getting planted and are still exposed to weather risks. "Sellers need to hope that demand is there to sell against [it]," said a market source, adding that forfeiting the allocated capacity would cost them a fee of $8/mt.

"It is still tricky to forward sell [based on new crop timing]. If it rains at harvest, wheat may turn into feed [grade] and it is going to hurt if you have milling sales on. Feed wheat sales are less risky even if [they capture] lower margins," said an Australian-based grains trader.

CBH will subsequently release a list of capacity owners for the various months and ports.