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Grains cooperative CBH Group declares force majeure after Apr 11 cyclone Seroja

Singapore — CBH Group, a grain growers' cooperative based in Western Australia, has declared force majeure for Geraldton and parts of Kwinana port zones following damages from cyclone Seroja on April 11, according to an emailed notification sent to customers seen by S&P Global Platts.

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"We are currently unable to use several rail lines and some key road networks are restricted, reducing our ability to move grains to port. This will further impact our shipping schedule and export program from the Geraldton port," CBH told Platts April 14.

Western Australia exports around 90% of its total wheat harvest and accounts for 40% of Australia's total exports. Kwinana is the main port in Western Australia, with shipping capacity at around 600,000-700,000 mt per month, trade sources said. The shipping capacity out of Geraldton is about 200,000-300,000 mt per month.

"Last night, one of my ships completed loading from Kwinana and will [arrive] in good time. The other two ships may face several more days delay. Geraldton is more affected compared with Kwinana," said an end-buyer source, who had earlier said: "I should be okay with small delays."

"Damaging wind gusts and heavy rain has occurred through the eastern Wheatbelt and is expected to continue as it tracks through the southern Goldfields and South East Coastal district. There has been significant disruptions to the CBH rail, road and shipping programs due to Cyclone Seroja. Many parts of the rail network in the Geraldton and Kwinana port zones were closed by Arc Infrastructure as of 12 pm April 11," the email dated April 12 said.

Major highways and main roads in the Midwest area had closed Sunday afternoon, while all ships were taken out of the Geraldton port and moved to the inlet by evening 6 pm, the email said. Mid West Port Authority is inspecting the channel in Geraldton before ships can return.

CBH is assessing the full extent of the damage to road, rail networks and storage facilities in Geraldton and northern Kwinana port zones.

"Early indications suggest that we have lost tarps from bulkheads at our Narngulu and Moonyoonooka sites and infrastructure damage at Goodlands. Preliminary reports indicate that our port infrastructure has not incurred any significant damage," the email said.

"Kwinana South, Albany and Esperance port zones have noted no structural damage, although wet weather is impacting our outloading activities," it added.

Wheat prices facing some upward pressure

Australian wheat prices were finding some support from the logistical challenges in both the east and west coast.

Floods in New South Wales during the week ended March 21 had halted rail lines and blocked off main highways, Platts reported earlier.

"I think it's generally supportive. Rail issues on the east coast, two to three weeks delay in Western Australia, it leaves South Australia and Victoria, who are well sold until June," said a trader in Australia.

Others said there didn't appear to be a direct impact on prices from the force majeure. "Offshore [markets are] firmer so Australia is supported a bit by that," said another trader.

Australian wheat suppliers are mostly sold out for the months of May and June, with shipments for July onwards facing stiff competition from new crop Black Sea wheat.

Adds para 2, 3 and 4; section below on prices