From the AFR:

Back-in-black GrainCorp grows markets above and beyond China

GrainCorp has grown the number of countries it trades with to about 50 in the wake of China’s trade sanctions on Australian agriculture and is eyeing growth in the livestock nutrition sector.

The giant east coast grain handler and marketer said on Thursday that it expected full year underlying net profit after tax of $60 million to $85 million on the back of a huge harvest in NSW and strong international demand.

The profit forecast takes into account a maximum $70 million payment GrainCorp will have to make to crop production insurer Aon and compares to an underlying NPAT loss of $16 million last year.

GrainCorp said it expected underlying earnings before interest, taxes, depreciation, and amortisation of $230 million to $270 million, up from $108 million in fiscal 2020 when it received $58 million from Aon in the first year of the crop insurance agreement.

Managing director Robert Spurway said a widespread break in drought had translated into one of the biggest crops in history in Australia.

Farmers have delivered 13.8 million tonnes into GrainCorp’s receival network across Queensland, NSW and Victoria, more than the 12.9 million tonnes received in 2016-17 when Australia produced a record crop.

GrainCorp, well into its first major export program since the 2016-17 crop, has exported 1.7 million tonnes of grain since October and its ports are booked to near capacity through to September.

In it processing business, GrainCorp expects an increased supply of canola seed to support strong oilseed crush margins.

Speaking at the company’s virtual general meeting on Thursday, Mr Spurway declined to comment directly on China - which crippled the barley trade with 80 per cent-plus import tariffs - when asked about overseas markets.

“We have continued to see strong demand around the world,” he said.

“We don’t disclose individual trading with individual countries. I can confirm that we have broadened the range of countries and companies that we deal with significantly from around 30 to about 50 countries.

“We are very confident in the demand we are seeing for grain, we are in the middle of a strong export task. We have no material exposure or risk to any of the markets that we are trading with currently.”

Mr Spurway also talked up the company’s investment in Future Feed, a seaweed-based livestock feed that cuts methane emissions, and growth opportunities in agriculture-related industries.

He said FutureFeed could be a “game-changer for the global animal nutrition market”.

Mr Spurway said GrainCorp wanted to make more of its unique infrastructure network and expand its bulk materials portfolio.

He said the animal nutrition sector, where the company already has assets in Australia and New Zealand, had “significant potential for growth and innovation and is an area where GrainCorp can leverage our current investment and expertise”.