GrainCorp stoked concerns over the quality of Australian wheat by warning of a "dramatic" rise in insecticide levels in grain deliveries.

The grain handler, in a separate announcement to its unveiling of a jump in half-year earnings, threatened bans on farmers or trucking firms flouting pesticide regulations after finding levels of phosphine gas in crop deliveries to its silos had "dramatically increased in recent weeks."

The warning follows widely-voiced concerns over the quality of Australian wheat which has, reportedly, driven many buyers to other sources, such as the Black Sea exporters.

The country's wheat shipments fell by more than 8% in the first seven months of the 2009-10 marketing year, which started in October, although a robust currency has also been blamed for the decline.

AWB, the rival grain handler, has called for a regulatory body to oversee quality of the grain, with GrainCorp admitting that feedback had revealed "some quality problems.”

Many of the concerns have centred around pesticide residues, which last month prompted Indian officials to seize 1,250 tonnes of Australian wheat delivered to the port of Chennai.

A GrainCorp spokesman said that phosphine, which dissipates after application, was a "different issue" to the insecticide found at Chennai.

Problem levels of phosphine had also been found in only a small number of deliveries, of perhaps eight or nine loads out of some 50,000 truck loads.