Company News

Key insights: The Australian private sector has dipped into contraction territory for the first time in the CBA PMI survey’s history, indicating the Australian economy has lost momentum. Behind the reduction in output was a dip in services business activity amid reports of a soft market demand and drought conditions. The move lower in PMI readings is part of a global trend and highlights the increasing concerns central bankers hold about the global economic outlook. Key quotes from CBA Chief Economist Michael Blythe: “The dip in the PMI below the 50 line that separates expansion from contraction is a significant event. It is the first negative reading in the life of the Australian PMI survey.” “It indicates a loss of momentum in the Australian economy at the start of 2019. It also underlines the shift in forward guidance by the RBA to a more neutral setting.” “The divergence between contracting service sector activity and expanding manufacturing activity should be noted. It shows the slowdown is not broadly based and the more forward looking components like jobs and business sentiment point to a recovery later in 2019.”  

The supermarket giant Woolworths this week broke ranks and announced it was going to stop selling A$1 per litre milk. It will now charge A$1.10, or A$2.20 for two litres. Chief executive Brad Banducci made it clear that there was more to the decision than straightforward economics: We’ve heard the outlook will continue to be extremely tough for dairy farmers… This is affecting milk production and farm viability, which is devastating for farmers and the regional communities in which they live. The Labor Party has been threatening to impose a minimum farm-gate price. Will what Woolworths is doing help farmers? Only a bit. Milk prices are internationally set The so-called “milk wars” began on Australia Day 2011 when Coles announced it was cutting milk prices to A$1 a litre. Woolworths and Aldi followed suit. The milk market does not just consist of dairy farmers, supermarkets and customers. There are also the processors – companies such as the ASX-listed Murray Goulburn, Parmalat, Lion and Fonterra – that stand between farmers and supermarkets. Then there is the international market for dairy products like butter, cheese and milk powder. The biggest determinant of farm gate prices in Australia is not what the major supermarkets do, but world dairy prices. The Department of Agriculture says 37% of Australian milk production is exported. Add to that the roughly 35% that goes into locally consumed butter, cheese and milk powder that is subject to competition from imports. You can quickly see the prices of nearly three-quarters of the milk produced in Australia are set globally. Dairy Australia has a higher estimate. Because even fresh milk is subject to foreign competition, it believes 90% of the annual movement in farm-gate prices comes from changes in international prices. Those changes are beyond the effective control of Australian farmers and regulators. Many of them are the result […]

capSpire, a global consulting and solutions company serving the energy industry, is pleased to announce the opening of its Australian entity, capSpire Pty Ltd, based in Sydney. capSpire has already worked with a number of clients across Australia over the past five years but is now investing in a formal entity to provide a permanent base from which to conduct its operations in the region. The Australian office will build on capSpire’s international experience and its reputation as the choice advisory, technology delivery and operations support service provider for energy and commodity management organisations across the U.S. and Europe. “capSpire brings something different to the Australian market; Deep energy and commodity domain experience, gained from working with more than 100 of the leading energy players in the world, coupled with extensive technical expertise in delivering successful project and program outcomes for our clients. Our clients tell us that this proven combination of industry and technical expertise is something that they have not experienced in the past,” says Dave Webb, Managing Director. “Now is the right time to expand our footprint in Australia. Our wealth of experience from other regions is highly relevant to the Australian markets. Equally, we have significant experience of working with our clients to successfully deliver market readiness during periods of change. With our extensive vendor partner network across energy management, E/CTRM, digital and analytics domains, we ensure that we bring right fit advice and solutions to our clients. We are very much looking forward to sharing our experience and expertise with clients in the Australian market,” says Mike Scharf, Co-Founder. The establishment of the Australian entity will become capSpire’s seventh global location with existing offices already dotted across the U.S. and Europe and follows on the back of nine successive years of growth. The entity will […]

Greg Evans, Chief Executive Coal has now asserted its pivotal role in the Australian economy – it is our largest export, and it remains the dominant fuel in our energy mix. The export performance is a resounding rebuttal of coal detractors who have repeatedly called the end of this iconic industry due to falling demand. Trade numbers released today by the Australian Bureau of Statistics confirm coal was the nation’s largest single export in 2018. Total coal exports in the past 12 months to the end of December were valued at $66.2 billion up from $57.1 billion in 2017. The next largest export was iron ore which was valued at $63 billion. Historically coal has been Australia’s most significant export contributor, and the latest data signifies a resurgent industry with a positive future. Coal was previously our largest export in 2009. The robust performance of the sector has delivered tangible benefits for all Australians including across the coal regions of Queensland and NSW. The benefits include over 150,000 direct and related jobs and rising tax and royalty collections. Coal royalties provide $5.5 billion directly to those two State governments while overall tax collections and the flow on economic activity has helped improve the Commonwealth budget position. In addition to exports coal also benefits the domestic economy where coal-fired power, including brown coal in Victoria, accounts for over 70% of electricity generation in the national electricity grid. Coal-based generation remains the cheapest and most reliable electricity in Australia. Asian demand for high-quality Australian coal is expected to remain strong with respected industry analyst Commodity Insights recently forecasting the requirement for up to an additional 500 million tonnes of coal per annum comprising both thermal and metallurgical coal by 2030. Australia, however, cannot take the continued industry strength for granted and commercial […]