May 15, 2006

Australia hopes for swift end to wheat negotiations with India

Australian wheat exporter AWB Ltd said on Monday (May 15) it hopes for a swift end to the dispute with India over the terms of a wheat contract.

AWB spokesman Christian Sealey said the delay in a 400,000-tonne shipment to India was due to strict quality standards stipulated.

Due to differing interpretations of the contract term "zero tolerance" for weed seeds, pesticides and other material in wheat shipments, shipments are now being delayed.

Indian officials had complained in late April of high pesticide levels in Australia's first two shipments of around 100,000 tonnes. However, the issue has been resolved and the shipments have been unloaded.

Loading for the new shipment is now being delayed at Australian ports in while discussions are going on, Sealey said.

Meanwhile, AWB is also looking at alternative markets for its wheat in case it is unable to resolve the issue.

India has recently floated a tender for an additional three million tonnes of wheat, with Australia and the US are expected to bid for the order.

The USDA is also working to make India revise its conditions while US exporters were monitoring developments and leery of the strict conditions associated with the tender.