May 22, 2007

Australia set to decide on its wheat export system

The fate of Australia's wheat export system will be known this week as Prime Minister John Howard will announce the Cabinet's decision regarding the issue.

The Australian Wheat Board (AWB) has been removed of its single-desk wheat system due to its alleged A$290 million (US$238.8 million) bribe to the toppled Saddam Hussein's regime.

The Cabinet is expected to maintain the single desk despite the AWB scandal following intense political pressure from wheat growers who are seeing the single desk as an advantage in extremely competitive global wheat commerce.

The AWB scandal put Australia's multi-million dollar wheat trade relationship with Iraq in jeopardy after Saddam was overthrown.

But Iraqi Foreign Minister Hoshyar Zebari the war-torn nation still wants to import Australian wheat and discuss other bilateral trade issues with Australia.

He said Iraq has imported Australian wheat for the past 50 to 60 years, but warned it was a competitive market, stating it has received many wheat offers from Canada, US and Europe.

Iraq wants to keep importing Australian wheat because the Iraqi palate has been used to the tough and dry quality of Australian wheat for over 50 to 60 years, according to Zebari.

Zebari said Australia's bid would be taken seriously because of its historical relations with Iraq.

Australia sold about 450,000 tonnes of wheat to Iraq last year.