June 22, 2007

Australia's CBH joins bid anew for big wheat export licence

Western Australia's (WA) grain storage and handling giant CBH Group has joined the wheat export bandwagon again by applying for a big new licence to export wheat from the next harvest on the monopoly temporarily left with Australian Wheat Board (AWB).

CBH spokesman Rhys Ainsworth would not verify the volume of its wheat exports but sources say it would reach 2.7 million tonnes.

The licence approval would again account for a big chunk of WA's wheat harvest as big areas of the northern wheat belt face another poor season due to lack of planting rains.

The move coincides with the expected passage of legislation through Federal Parliament implementing the government's controversial changes to Australia's export wheat marketing following AWB's embarrassing involvement in the Iraqi kickbacks scandal.

Under the changes, AWB will be permanently removed of its export monopoly until July 1 next year. The delay was to give grower groups until March 1 to set up a new entity to manage the single desk completely separate from AWB or further deregulation will take place.

CBH triggered a huge controversy last harvest when it applied for a licence to export two million tonnes of wheat to its flour mills in South-East Asia, promising to pay a better premium to growers compared with beleaguered AWBs export incentives.

While some WA growers welcomed the opportunity not to deal with the disgraced export monopoly marketer, others criticised CBH for what they saw as further undermining their cherished 67-year-old single desk marketing system. McGauran ultimately granted CBH a 500,000-tonne permit.

Its move this year is likely to provoke similar debate as the pro-single desk grower groups from four States grapple with the tight March 1 deadline to come up with a new single desk exporter that has wide support and adequate financial backing.