Exporting grain can be complex and often involve significant risk. Understanding the export process and the regulatory considerations pertaining to both Australia and the country of export is essential. This document outlines step-by-step the process of exporting grain from Australia — it begins with the selling of grain and then the movement of grain from on-farm to its end point with the buyer.

Exporting grain from Australia — some considerations

Australian Export Grains Innovation Centre

STEP 1: Selling your grain

STEP 2: Harvest, storage and outturn quality

Sell grain

Harvest/storage

Contracts

Quality confirmation

• Investigate options that are available in selling the grain.• Confirm customer requirements and critically assess ability to supply and meet all conditions.• Some areas to be aware of include: — Buyer payment method and associated risk, — Selling quality at load port or at discharge port, — Quality and quantity of grain sold, including tolerances, — Shipping and certification needs, — Additional costs (tariffs, other fees and charges).

• Investigate options for harvesting and storing grain.• Harvest grain• Options for storage include: — Deliver to bulk handler, — Store on-farm, — Deliver to a third party, non-bulk handler, storage company.

• Review and understand the contract requirements.• Understand all the different terms and conditions that can apply to contracts, eg. Grain Trade Australia, Grain & Feed Trade

Association (GAFTA), Incoterms, Federation of Oils, Seeds and Fats Association (FOSFA)• Ensure your contract contains  the terms and conditions that you agreed to and suit your trade.• Understand the default process and the dispute resolution process. Particularly important if the commodity has already been

shipped to another country.

• Consider quality specifications of the grain and consequences of this on the contract requirements.• Confirm quality of grain via testing that meets buyers requirements.• Consider storing options (unsealed or sealed storage) and fumigation. (Note: grain outturned with the bulk handler or third party may differ from that originally delivered)

STEP 3: Quality and market (Country) considerations

Country requirements

Quality characteristics

• Consider specific quality characteristics.• Quality items vary depending on export grain customer requirements. Some attributes are described below: — Wheat: grade, protein, moisture, screenings, — Barley: grade, malt/feed, protein, screenings, — Canola: grade, oil bonification.

• Consider country requirements and the effects on contract obligations.• It is important to consider the requirements and specifications of the country that the grain will be exported to including

various import regulations, requirements, duties and taxes:• Australian Government Plants database (www.agriculture.gov.au) is one source of information on importing country

requirements for plant and plant products. See the website (www.agriculture.gov.au) for more detail. The grain buyer may also be able to assist.

• Country import requirements may include: — Phytosanitary and other country restrictions (certain diseases or pathogens). — Submit ‘Notice of Intention’ or ‘Request for Permit’ form

STEP 4: Payment considerations

STEP 5: Logistic considerations

Payment

Logistics to port

Letter of Credit

Charter vessel

Cash against Documents

Organise paperwork

Quality on shipment

• Consider the various payment options available for the buyer to utilise.• It is important to discuss your payment consideration requirements with your bank.• Payment options offered by buyers can vary considerably. • The payment method decision may be a commercial decision or possibly bank enforced decision.• Two common types of payment are Letters of Credit (LCs) or Cash against Documents (CAD).• These payment types are detailed below.• Insurance has also be obtained which can help ensure payment and could be worthwhile in considering — speak to your bank

or financial services provider for more information.

• Organise domestic logistics to port. — Often this may be via bulk handler or third party logistics company.• Liaise with port authority (often the bulk handler) to organise the delivery of grain to port. — As above, check agreement with port authority as to the specifics of bringing the grain to port. — Can be restrictions in terms of delivery date to port (e.g amount of days for delivery to port x tonnage delivered each day means you are not able to fulfil contract requirements).

• The buyer is responsible for establishing the LC.• At a predetermined number of days before shipping, the buyer deposits funds and opens LC. • LC’s may be lower risk level then CAD payment. However, it is not no risk — spelling mistakes or typing errors in the LC could

mean that payment won’t be made — you haven’t been able to meet all the items in the LC.• Items to present for LC often include but may not be limited too: — Bill of lading, — Invoice, — Superintendent results, — Fumigation results.

• Consider the requirements necessary for chartering a vessel.• Ship: — May need to organise shipping broker if contract is Cost & Freight (C&F)/Cost, Insurance & Freight (CIF). — Examine all charter part conditions thoroughly. — Organise load port agent at load port to oversee loading. Often this is done via the bulk handler or port owner.

• This option is more often used for customers, with whom the seller has applied a low risk rating against. Payment is received after you present documents to show shipment is loaded with prerequisite contract obligations met.

• This may be higher risk than an LC.• Can be cash against original documents or cash against copy of documents — each type carries it own risks.

• Ensure all paperwork obligations are met.• If the grain is to be channelled via a bulk handling system significant advance notice of movement of grain and shipping

intention may be required.• If the grain is not handled via a bulk handler, there may still be a need to inform the bulk handler of the intention to deliver

the grain to port. Contact the relevant bulk handler for more detail on this.• Organise vessel nomination paperwork with bulk handler.• Liaise with port handler to manage outturn from port to vessel.

• Ensure quality of grain on shipments meet contract specifications.• Contact the Australian Government for advice on biosecurity: more information: www.agriculture.gov.au/biosecurity — These may include ‘Certificate as to Condition’ and ‘Declaration and Certificate as to Condition’• Bulk handler may take samples of the grain as it loads (eg. 2 kg sample per tonne). — Results may be available to seller.

Department ofAgriculture and Food

AEGIC is an initiative of the Western Australian State Government and Australia’s Grains Research and Development Corporation.

Websites that may provide additional information

NOTE: This information is a guide only and we encourage those involved in exporting grain to conduct their own due diligence.

Australian Government export documentation system (EXDOC) http://www.agriculture.gov.au/export/certification/exdoc

Australian Government Plant Export Operations http://www.agriculture.gov.au/export/controlled-goods/plants-plant-products/plantexportsmanual

Grain Trade Australia (GTA) www.graintrade.org.au

Austrade www.austrade.gov.au/Getting-ready-for-export/default.aspx

Australian Export Grains Innovation Centre www.aegic.org.au

Disclaimer January 2014 (minor updates August 2016)

All contents copyright ©AEGIC. All rights reserved.

The related bodies corporate, directors and employees of AEGIC accept no liability whatsoever for any injury, loss, claim, damage, incidental or consequential damage, arising out of, or in any way connected with, the use of any information, or any, error, omission or defect in the information contained in this publication. Whilst every care has been taken in the preparation of this publication AEGIC accepts no liability for the accuracy of the information supplied.

STEP 6: Shipment considerations

Shipping overview

Shipping considerations

C&F/FOB — additional detail

Bulk

Containers

Shipping slots

• Review shipping considerations.• Shipping and chartering is a highly specialised task. It is advisable to engage a authorised ship broker or freight forwarded if

you do not have the necessary knowledge and experience. • Contact Grain Trade Australia (www.graintrade.org.au) for more information.

• Consider shipment methods that may be used in the export process. Common decisions to be made include: — Shipment in bulk or containers. — Terms of sale/Incoterms. These include Free On Board (FOB), Cost, Insurance & Freight (CIF) or Cost & Freight (C&F). It is suggested that you familiarise yourself with the Incoterms to be used. More information may be found on various websites or Incoterms 2010, a publication from the International Chamber of Commerce.• This will help determine the need to organise access to charter party, shipping slots and freight and insurance broker needs.

(Note there will be different requirements for bulk vs container exports).

• C&F contract means the seller is responsible for loading onto the ship, the freight and also at final port(s).• FOB contract means the seller is not responsible for freight to the destination port, but remains responsible for loading the

vessel including meeting any loading time conditions. — FOB sellers can be liable for demurrage (penalties for delays in loading the vessel). When the ‘notice of readiness’

is presented to the seller, the time for the period of loading commences regardless of whether the vessel in the berth and able to be loaded or not.

• Shipment in bulk cargoes can be complex and high in financial risk. They should only be considered for large tonnes:• Some other matters that need to be considered include:• Freight: — Organised via broker (most common option), — Organised directly, — Charter party conditions, — Delivering grain to port (organise with port authorities), — Loading of grain onto vessel (organise with port authorities).

• Review container shipment requirements if required.• Shipment in containers is more often used for small, regular shipments.• It has it’s own set of requirements, different from bulk shipments and some of these include:• Working with a container packing company to get grain packed into the containers. • Shipment options may include: — Deliver (Delivered Container Terminal (DCT)) requires organisation with a packing

plant/company to get a rate to pack, stock and delivery the containers to the container yard, — Alternatively the container could be freighted at the Sellers cost to the final port.• Cargo to be shipped in food quality containers.

• Review shipping slot requirements. • Vessel and shipping slot availability may need to be considered. Shipping slots may be in short supply for bulk shipment and

substantial advance notice may be required.• Organise access to shipping slots via the bulk handler/port owner.• The shipping slot agreement should be reviewed carefully as there may be unexpected conditions (eg. some agreements may

not allow direct delivery of grain to port).