On-line grain trading site set for mid-June launch
By Robert Harris
ARABLE farmers will be able to sell grain over the internet within two weeks.
Glencore Grain is launching a live trading site, the first of its type in the UK, at Cereals 2000.
Using grainman, farmers will be able to offer cereals, oilseeds and pulses to the market when they wish and make an instant trade, says the company.
With a few clicks of the mouse, commodity, tonnage, and time of movement – from spot sales to 18 months ahead – are entered. Seconds later, an ex-farm price appears on the screen. Glencore claims that, being post-code specific, the system offers the best price available for that farm.
Growers are becoming more exposed to volatile world markets, says trader Robert Kerr. "There is little prospect of any significant recovery in grain or oilseed prices in the short term. To make a real impact on farm incomes farmers have to make better decisions at buying and selling their crops."
The site provides live currency market data, and displays London, Chicago and Paris futures prices. This, plus regular market commentary from Glencore traders, will keep growers abreast of the market.
That is important, says Mr Kerr. For example, the London wheat futures price for May 2000 peaked at £84/t a year ago. At its recent low it slumped to £65/t. "That is a £19 spread for one month. It is our aim to try and get as many farmers into the top quartile of prices as we can."
Grainman also provides account information, grain sample results, contract details and financial records.
Glencore trades about 1m tonnes of grain a year, and has about 11,000 farmers on its books, mostly farming 80ha (200 acres) plus. More than half such growers now have access to the internet, recent research suggests.
Glencore believes 1000-2000 farmers could use the system in the first year, trading about 100,000t of grain. Growers can access www.grainman.co.uk from June 14. *
Merchants keep an eye out for net gains
Other merchants are watching with interest. Cargill will have on-line trading within 12 months, says the companys Paul Antcliff. "It is a logical use of the technology, and there is no doubt it could add value to the whole process." A portal, offering access to several companies, may be more farmer-friendly, he adds.
"If the industry decides to go down this route we will have to go with it," says Richard Whitlock of Banks Agriculture. "Whether it will be widely taken up for something as variable as grain remains to be seen."
Supplying contract details is a good move, says Ian Douglas of Allied Grain. "Along with market information and news, thats the part we are all working on. "But I cant see what added benefit trading on-line is supplying. Buyers want grain cheaper, farmers want more for it. But with only a £1 margin in the middle, there is no cost to take out."