After a jump in operating profits in the six months to March 31 to $16.2 million, Australia’s Elders will be maneuvering to expand its presence in the grain sector, and is reportedly in negotiations with numerous industry players after requesting expressions of interest.
The group’s plans are based on the belief that it can use its network across Australia’s grain belt to accumulate high volumes of grain for traders, but the company is still undecided if it will work with a single or multiple partners.
Elders has conducted talks with CBH, GrainCorp, Louis Dreyfus, and Archer Daniels Midland (ADM), with some offering to provide inputs to farmers in exchange for a secure grain supply, however Elders has stated that this arrangement is not key to a deal.
Although a small part of Elders operations, grain has been a lucrative business for the group on the back of strong livestock prices, which are 26% higher than last year. The company posted net profits after tax of $15.9 million in its half-year results, compared to a $10.2 million loss the previous year. Based on tight supplies, strong demand, and a low Australian dollar, Elders expects the upward trend in cattle prices to continue, supporting their grain expansion plans.
Lynda Kiernan is Editor with HighQuest Group Media and of the Oilseed & Grain News. If you would like to submit a contribution for consideration, please contact Ms. Kiernan at email@example.com.