CGX pushes through 2 million tonne this season

Nathan Cattle believes CGX's unwavering commitment to independence is critical in operating a grain exchange that meaningfully improves market efficiencies.

Clear Grain Exchange (CGX) has now traded more than 2 million tonnes in the 2020/21 season, the first time this has been achieved in a single season.

The continuing growth of the grain exchange is partly attributable to CGX’s unwavering commitment to independence according to CGX managing director Nathan Cattle.

‘My time working at the New Zealand Stock Exchange (NZX Ltd) embedded core values and learnings around what was required to operate an electronic exchange that can meaningfully improve market efficiencies and in doing so, the economics for all parties.’

‘CGX is a pure exchange. We’re not a buyer, seller or advisor of grain.Providing a secure exchange that promotes a more efficient market is all we do.'

'That’s why it works so effectively because there are no inherent conflicts or compromises made. We just focus on operating best practice to ensure all buyers, sellers and agents can participate and achieve the real price for grain.’

Nathan believes that most in the industry are starting to appreciate the importance of the independent and non-bias position of the exchange.

‘We are effectively trying to help buyers find sellers and sellers find buyers of grain, to do this properly you can’t have a conflict.’

‘There is value in more efficient markets for all parties. Growers and their agents benefit from every buyer being able to try and buy their grain, buyers benefit from more easily finding grain for sale, and supply chains benefit because grain transacting is often in a better location for execution than it may be if buyers restricted themselves to accumulating from a segment of the market only.’

These benefits are evident in grain prices trading on CGX often being well in excess of published bids advertised at the same time.

‘Growers are getting better value for their grain then they may otherwise if they were negotiating with a handful of buyers, and buyers are able to pass on the benefits they receive from more efficient accumulation via improved prices.’

The proof is in the pudding with more growers, agents and buyers using CGX for grain transactions.

‘The number of growers using the exchange this season has grown to just shy of 3,000 with many more than that registered and getting familiar with the system, 33 different agent businesses have utilised the exchange to sell grain on their grower’s behalf, and more than 200 buyers are registered.’

‘We are still relatively new - four years ago a lot of people were asking who Clear Grain Exchange was, but now if you ask a room of growers most know of us, and half probably know how to use the exchange.’

The secure settlement and clearing services CGX provide also create significant efficiency gains and protection from counterparty risk.

‘This area of our business has been growing significantly. Parties to a grain transaction are seeing benefits in utilising our settlement services to improve security of the transaction, but also make use of the digitised back-office functions such as paying levies, end point royalties and ensuring best practice in managing bank account details.’

For those that don’t know, CGX operate a secure settlement process that ensures growers retain title of grain until they’re paid, with payment occurring within 7 business days. The average time it takes for settlement has been just 4.5 days.

‘There’s plenty more work for us to do. We’ve been investing in our technology to continue to improve the user experience and service offering and are looking forward to releasing some significant enhancements ahead of the coming harvest.’ Nathan said.

‘Most importantly our team are huge believers in what we do and motivated to continually improve our service and reach whilst being true to our core values of operating an independent online exchange for everyone’s benefit.

• Set THE PRICE YOU WANT for your grain

• ALL BUYERS can then see your grain and try to purchase it

• Be confident that FULL VALUE is captured when your grain sells

• SECURE SETTLEMENT means you retain title until payment

• Fast payment WITHIN 7 BUSINESS DAYS of delivery

• EASY TO USE and FREE to Register, OFFER or Edit, at anytime

Please contact us at anytime by calling 1800 000 410 or connecting with us on Twitter @ClearGrain

If you use a grain marketing agent, you can authorise them to act on your behalf on the exchange to manage your offers and sales!