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KAROLIN MACGREGOR
WHEN Paul Willows became
frustrated over a lack of forward
pricing for cereals in Tasmania
it sparked a new business idea.
Mr Willows had spent much
of his career working in agricultural trading, including grain,
in countries such as India,
China and Singapore.
However, it was while he
was growing a canola crop on
his farm near Evandale about
10 years ago he decided to start
the XLD Commodities business
with friend Lachie Stevens.
“Primarily the reason we
set it up is I got frustrated one
year when I was growing a
canola crop and I couldn’t
get a forward price for it,” Mr
Willows said.
“I was carrying on and
whingeing to Lachie . . . he said
well, stop your whingeing and
do something about it.”
The pair set up the business
while Mr Willows was
working overseas. With Mr
Stevens based interstate, the
business teamed up with TP
Jones to offer a local network.
The arrangement was in place
until TP Jones was bought by
Nutrien Ag Solutions.
Mr Willows and Mr Stevens
are still directors, along with
Randall Trethewie.
“We set it up to provide
that forward price discovery
and we’re still doing that,” Mr
Willows said.
The company used to store its
grain through TAP Agrico but
since December XLD is leasing
the TAP facility at Powranna
and handling the storage side.
The company organises interstate grain supplies for its
clients, including fish-feed
companies, feedlots, poultry
producers and dairy farmers.
“When you’re providing a
service to customers there’s a
lot of logistics into Tassie,” Mr
Willows said.
INFORMATION IS POWER:
Paul Willos set up XLD
Commodities to provide
forward pricing. Picture:
KAROLIN MACGREGOR
He said the ocean leg made
it challenging to get grain from
country Victoria or NSW into
Tasmania.
The bulk of the grain
supplied is wheat and barley
with smaller volumes of meal
including soybean and canola.
The company is branching
out to provide forward prices
on fertiliser going out six to 12
months.
“Because the markets are
moving so much, I like to
think of our role as providing
transparency on the prices so
a consumer or farmer can take
advantage of the volatility of
prices moving up and down.”
Despite some harvesting
interruptions due to cool and
wet weather, so far Mr Willows
said the Tasmanian season had
been progressing well with not
much moisture trouble.
‘
I was growing
canola and
couldn’t get a
forward price . . .
Lachie told
me to stop
whingeing and
do something
about it
PAUL WILLOWS
“You have the odd cool day,
but the yields are fantastic and
the quality has been really
good.”
The Powranna site has capacity to store 25,000 to 35,000
tonnes of grain depending on
how much goes through and
whether they can use bunkers.
One of XLD’s new initiatives
is real-time information about
loads of grain being delivered
to the site, including moisture
levels.
“If a truck comes in and it’s
over moisture people will get an
alert straight away,” he said.
“If the screenings are a bit
high they’ll know straight away
so they can adjust things as
needed.”
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While the state’s grain production remains fairly consistent,
he said overall consumption
was on the up and last year it
jumped about 12 per cent.
He said interest in forward
pricing for major inputs like
grain and fertiliser was growing.
“I think that’s probably the
next evolution in agriculture,
people will focus more on their
margins,” he said.
Mr Willows said there was
always discussion about prices
but he encouraged people to
think more about their margins.
He said forward pricing could
help farmers make decisions
well in advance, depending on
individual cropping programs
and gross margins for other
crops.
“It’s not for everyone. If
you’ve got marginal country
and you’re not sure what your
potential yield is, you probably
don’t want to commit too much
but if you’re doing irrigated
canola and know what your
yield will be within a range it’s
a good tool,” he said.
Mr Willows said there was
significant variation in the
current market.
“I’d say prices are very
volatile. We had a 5 per cent
correction on Friday night
which is pretty big, but overall
I think we’re in a strongly
uptrending market, for prices
down here at least.”
He said demand from China
was having a big impact.
“Even though grain is not
going to China, China is
sucking [it] from the rest of the
world and we’re filling in the
blanks,” he said.
Mr Willows said despite the
extra freight costs, Australian
barley was now being sold into
markets with better prices and
less risk after China slapped
hefty tariffs on it.
“I personally think if China
doesn’t want our barley, it’s
perfectly fine,” he said.
“People like me in the trade,
we just re-adjust ... the trade
works it all out.
“I think it’s really healthy that
we’re lessening our reliance on
one buyer.”
G ROW ING
D BY
RUR AL TA SM
ANIA
T P3
K STAR
TO QUIC
BID OFF
SALES
STOCK
SMOKE FREE
PUBLIC EVENT
NO PETS ALLOWED
EXCEPT TRAINED
SERVICE ANIMALS
2019 Guide shown for reference
TASMANIAN COUNTRY Friday, January 29, 2021 05