GrainCorp Closes 2002 Sorghum Pools

SYDNEY - May 13/02 - SNS -- GrainCorp Limited has closed the grain sorghum pools it was operating for the 2002 season, realizing an estimated final return of A$182 per metric ton (MT) for the No 1 grade product and $172 for No 2 grade sorghum sold through the marketing pool.

Commenting on the results, GrainCorp said sorghum prices have softened over the last two years due to the strength of the Australian dollar and the drop in wheat values, encouraging end users to source cheaper wheat. In order to protect existing pool participants, GrainCorp has elected to close both the sorghum No. 1 and No. 2 Pools.

GrainCorp offered an additional service to Grain producers with the Deferred Payment alternative for the sorghum No. 1 and No. 2 Pools during the 2002 season, and was pleased with the support.

Charlie Coventry, GrainCorp Pools Manager, said a large proportion of growers participated in the Deferred Payment initiative enabling them to structure their income to meet financial objectives.

GrainCorp sorghum pool participants were paid an initial approximate 80% advance, with a second final payment to be distributed at the end of the marketing year.

The Deferred Payment alternative paid a smaller harvest advance of approximately 10% (based on the initial Pool Estimate) within 21 days of delivery. A second advance of 70% will be paid to growers in the first half of July with a third and final payment at the end of the marketing year.

GrainCorp's sorghum No. 1 Pool current estimate is $182 Basic Delivered Port and No. 2 Pool current estimate is $177 Basic Delivered Port, a $5 discount to the No. 1 pool. GrainCorp Pool estimates are quoted gross of deductions.

GrainCorp Pools operate by giving producers an advance, not a loan. Producers utilize the strength of GrainCorp's own borrowing powers to access finance at cost, which is currently 5.3%.

"In addition, all costs and calculations are shown to make GrainCorp Pools transparent and easy to understand," said Mr Coventry.