WHEAT and barley from Victoria and South Australia is heading to Queensland by boat in a rare occurrence for the Australian grains industry.
GrainCorp has put together a number of vessels from Wallaroo on South Australia's Yorke Peninsula and Portland in Victoria and sent them north to Pinkenba in Brisbane as part of a program that will total more than 100,000 tonnes of grain before new season crop comes on line.
There have been three vessels already delivered and at least one more is planned.
GrainCorp domestic customer manager Nick Chambers said the trans-shipments were caused by a dearth of feed grain in the north, making it economical to freight product in from the south.
Mr Chambers said while the southern grain was not cheaper than the scant local supplies or road freighted grain from southern NSW, it presented end-users with large scale, reliable stocks.
"The customers we are selling to are interested in decent volumes of grain - they are looking for two to four months' cover at a time."
MarketCheck managing director and long-time industry analyst Brett Stevenson said trans-shipments were a rare event in Australia.
"It certainly happened during the droughts... but it is not a frequent event."
GrainCorp barley trader Luke O'Connor said the last trans-shipment in Australia he was aware of was in 2007 when malt barley went from Western Australia to Victoria to meet domestic maltster demand.
Mr Chambers said these shipments were primarily feed barley with some ASW grade wheat also heading up.
The vessels are generally smaller, reflecting both port sizes and customer demand.
So far, 85,000 tonnes of grain has been delivered in three shipments, two from Portland and one from Wallaroo.
Mr Chambers said the sea freight of about $85 to $90 a tonne meant the product was landed on the inner Darling Downs and Burnett regions, where most of the demand is, for about $110/t, which is comparable with road freight.
The trucking costs in inland Queensland can be mitigated by backloading, he said.
The major difference was the ability to move large volumes of grain.
"It's difficult to get the trucks to move that volume of grain, its much easier to bring it around in bulk by sea," he said.
The downside of this was that GrainCorp was not that nimble in terms of supplying customers with southern grain in the short-term.
Mr O'Connor said it took about three weeks to accumulate the grain and move it north.
He said working in a port zone, rather than dealing with individual sites or even individual farmers with grain stored meant it was easier to put together parcels of grain.
Mr Stevenson said the opportunity to execute trans-shipments may influence the way grain marketers do business, given the falling international market.
"Those with contracts that are multi-origin may keep the grain they have in Australia to satisfy potential demand from our domestic industry, while meeting their international obligations with grain from another origin."
He said balancing domestic supply and demand until new crop came on board at the end of the year would be a delicate exercise.
"Carryover stocks may be run a long way down, given the massive export program and the market will be watching closely what is happening internationally to see whether there are any northern hemisphere issues that drive price up, or if the continued good conditions keep international values heading down."