Allied Grain takes regional approach to pool marketing
By Philip Clarke
ALLIED Grain has joined the swelling ranks of merchants promoting pool marketing as a way of spreading risk.
But while it is being packaged as a national scheme, under the title "Grain Marketing Solutions", in reality the pools will operate regionally.
"It is a very different market situation delivering wheat to Glasgow, compared with, say, Southampton," explains group managing director, Ian Douglas. As such, the pools for feed wheat, feed barley and oilseed rape will operate in three distinct areas – Scotland, the eastern counties and southern England.
A separate malting barley pool will be run in East Anglia only, based around the Allied Grain malting stores at Diss, Eye and Aylesham. "Once the farmer puts his grain into our store, we assume all responsibility for maintenance of quality and any subsequent rejections," says Mr Douglas.
No malting pool is being offered in Scotland, where contract growing is the backbone of the trade.
Growers must commit at least 100t to any one pool, to be supplied at buyers call, subject to a £2/t marketing commission for grain (2% for oilseed rape). Payment, which will be 28 days after each pool ends, will reflect individual quality.
In addition to its pools, Allied Grain is launching a "farmers marketing scheme", whereby the grower commits a minimum 100t to the company to trade on his behalf. The seller states his movement preference and payment requirements, and can also take out a minimum price option to secure his income. In return, Allied charges a 3% marketing commission.
"The introduction of Grain Marketing Solutions has been customer driven due to the increased volatility in the market," says Mr Douglas. But, despite the growth in the volume of grain being committed to these sorts of schemes, he does not believe it will distort trade.
"We are operating in an EU market with over 200m tonnes of grain. Even if the % of the UK crop committed to pools reaches the high teens, there will still be plenty of fluidity in the market." *