Import Standards Not to Blame for Grain Prices Sunday, May 18, 2003
With the release of the first crop contracts for the 2004 season there has been some concern from grain growers that the lower than expected prices may be due to changes being made to the Importation Standard for Grain.
Having consulted with industry representatives Grain Council Chairman Hugh Ritchie does not believe the changes to Import Standards are being used to pressure prices down.
"In fact the reverse could be true, as extra processing and therefore cost could be added to the imported product, said Mr Ritchie.
"The recent discovery of Wheat Streak Mosaic Virus in Australia highlights the need for New Zealand to improve the importation standard for grain.
"A stronger New Zealand dollar combined with a very large anticipated Australian planting and other international issues could see a weakening world price in 2004. The country of origin for imported grain is not expected to change and competition for New Zealand growers would be from the same markets as under the old importation system.
"There has been an attempt by one company to differentiate between its loyal growers and general supply, showing the benefit of forming a relationship with end users. With milling contracts still to be released and slowing of the feed barley market, there are many factors to consider in relation to whether or not to sign contracts.
"I do not believe the lower announced contracts are due to the importation standard changes and so growers should consider the other outside factors in their decision process. However, it is disappointing that the prices have been moved so far. Growers need to keep abreast of international prices to aid in the decision making process."