It follows widespread anticipation, that further bids will emerge for leading Australian grain companies as the industry continues to consolidate.
Multinational groups are casting their eyes over AWB and Graincorp after the two announced plans to merge last week.
Viterra president Mayo Schmidt welcomed the latest moves to consolidate the Australian grain industry.
Mr Schmidt, who has been responsible for a major consolidation of the Canadian grain handling industry, said his experience was that further consolidation would be good in Australia.
“Viterra has had a successful history of leading change in our industry and certainly in consolidation of our market,” Mr Schmidt said.
“We are an organisation, whether it be in Australia or Canada or other markets, which believes that change brings about much needed consolidation and a healthier sector.
“We think any consolidation in our sector in Australia or other markets brings more discipline and allows it to be more competitive and for companies like ours to reinvest in the industry.”
Mr Schmidt said that coming out of its merger with ABB Grain last year, it was focusing on its earnings and share price.
“We’re not in a position to comment on our strategic intentions in any market,” he said.
Mr Schmidt said Viterra would continue to focus on its earnings stream and providing access for its customers to key markets.
The battle for AWB and Graincorp comes as prospects rise that the Australian grain sector faces its most buoyant year for a long time with both high prices and a good crop.
It follows the impacts of a bad drought which has cut the Russian wheat crop by 20 per cent, while widespread fires are destroying other crops, leading to fears that it will reduce exports by 30 per cent.
Mr Schmidt said the Canadian grain crop also had its problems with at least four million hectares not planted or unlikely to produce a crop from a total crop of 24 million hectares.
Rural Directions director Chris Heinjus said bids had reached $300 a tonne on Tuesday for the next wheat crop in Australia and $286 a tonne for last year’s crop.
“The market has been spooked and we also saw a technical rally last night,” he said.
“The price rise of up to $100 a tonne is the difference between being viable and not viable for many farmers.”
Callum Downs Commodity News analyst Malcolm Bartholomaeus said the price for last year’s crop had peaked at $225 a tonne last December and slumped to a low of $179 a tonne earlier this year.
“We have seen a phenomenal week with the wheat price rising by 100 a bushel and the largest price rally since 1973,” Mr Bartholomaeus said.
Elders Toepfer International managing director Mark Thiele said the direction of grain prices after the huge rise would be uncertain for some time as there were so many factors in play.
SA Farmers Federation’s grains committee chairman Michael Schaefer said it made sense for Viterra to be interested in both AWB and Graincorp, although it would be more difficult.
“We wouldn’t support Viterra buying AWB/Graincorp unless they divested some ports so there is room for competition,” he said.
