EPR Adjustments for the 2022/23 Wheat, Barley, Lupins Harvest and Deferred Sales Pool
The Wheat Harvest Pool EPR has been increased by A$5 and the Wheat Deferred Sales Pool EPR has been increased by A$15.
The Wheat Harvest Pool EPR has been increased to reflect the recent sales that have been committed to the pool at values that are supportive to pool equity as well as the ongoing execution of existing sale commitments in the pool.
Since the launch of the Deferred Sales Pools, pool management has consistently maintained a conservative approach in its publishing of the Wheat Deferred Sales Pool EPR to accurately represent the delayed nature of the sales execution profile within the pool. With the advancement of the sales program, it is appropriate to gradually remove some of the conservatism built into the published equity, and taking into account sales made to date an increase of $15 is appropriate at this time. Should the pool continue to execute sales around current market levels, it would be supportive of further adjustments higher in pool equity over time.
The Lupins Harvest Pool EPR has been increased by A$10 and the Lupins Deferred Sales Pool EPR has been increased by A$30.
The Lupins Harvest Pool EPR has been increased to reflect recent sales into both Europe and South Korea that have been committed to the pool at values that are supportive to pool equity as well as the ongoing execution of existing sale commitments in the pool. Additionally, recent currency moves have been supportive to pool equity.
The Lupin Deferred Sales Pool has consistently maintained a conservative approach to valuing underlying equity in consideration of the additional uncertainty due to the delayed nature of the pool sales profile. With the pool now well into its marketing program, it is prudent to update the equity to better reflect recent sales values and currency moves. It is anticipated that further positive updates will be made in due course should the marketing program continue to achieve similar levels to recent sales.
The Barley Harvest Pool EPR has been decreased by A$20 and the Barley Deferred Sales Pool EPR has been decreased by A$30.
Both the Barley Harvest Pool and Deferred Sales Pool EPRs have been decreased to reflect recent adjustments lower in achievable values in our current destination markets, primarily into the Middle East and South East Asia. Black Sea barley has been competing aggressively, particularly into Middle Eastern markets, pressuring values by up to US$40 per tonne over the last few months. Whilst pool strategy remains focused on positioning for the potential re-opening of the China-Australian barley trade, which would likely see a re-adjustment higher in pool equities, for now it is appropriate to express the more prudent valuation until such time as this is confirmed.