April 11, 2006

 

Australia's AWB says global wheat demand subdued

 

 

Global wheat demand has been subdued, with buying by India and Iran only partly offsetting reduced demand from China, Sarah Scales, general manager of the international unit of Australian exporter AWB Ltd, said Tuesday (Apr 11).

 

"We have made some good sales within a very tough global grain environment, including sales to India, Yemen, Kuwait and Iran," she said in a statement.

 

AWB announced a first distribution of A$397 million (US$290 million) to growers from collective sales of wheat grown last crop year ended Mar 31, 2006.

 

AWB sells wheat collectively on behalf of growers through a pooling system. A single year's harvest can take 18 months or more to sell.

 

Scales said that despite a tough market, AWB has made good progress with its sales and shipping programme, though it is far from completion.

 

The company has 17.7 million tonnes of wheat to export from domestic production last crop year, out of a bumper crop of 24.5 million tonnes.

 

Scales said the company's management programme also focused on supply chain efficiencies to minimise carryover tonnages from the 2004-05 crop into the sales period for the 2005-06 crop.

 

A critical price determinant would be the level of old crop carryover among Northern Hemisphere producers to the next crop sales period, she said.

 

AWB deducts storage, handling, transportation and other costs before passing on returns to growers. It also operates currency and commodity hedging programmes to buttress returns.