October 31, 2006

 

Australia's AWB lifts estimated returns on wheat exports

 

 

Australian wheat exporter AWB Ltd Tuesday (Oct 31) again lifted its estimate of gross returns from pooled export sales of its new wheat crop, confirming higher prices for Australia's wheat exports.

 

The benchmark Australian Premium White grade of 10.5 percent protein, was raised by AUS$3 a tonne to a gross AUS$248/tonne, FOB, extending a gain from AUS$219 late July.

 

Most other new crop grades also increased, with Australian Premium Durum grade of 13 percent protein increasing AUS$3 to AUS$261/tonne from the previous review eight days ago, while Australian Prime Hard grade of 13 percent protein rose by AUS$3 to a gross AUS$260.50/tonne.

 

Feed grade wheat was unchanged at AUS$205.00/tonne.

 

David Johnson, acting general manager of AWB's national export pool, said the increase was justified following a reduction in forecast domestic wheat output, changes to customer allocations and recent market movements.

 

Last Wednesday, AWB revised down its forecast for new crop production to a range of 9 million to 11 million tonnes from 12 million to 15 million tonnes previously.

 

The steep drop is expected to sharply limit export availability.

 

Firming US corn values are supportive of new crop Northern Hemisphere wheat values, which would support Australian wheat values from mid 2007 onwards, Johnson said in a statement.

 

The harvest is getting underway in northern areas and would finish around the south coast by Christmas.

 

Meanwhile, AWB is considering 12 applications for bulk wheat export permits, including at least one from Cooperative Bulk Handling Ltd., Glen Taylor, chief executive of regulator Wheat Export Authority, or WEA, said.

 

The applications for bulk wheat export permits are received initially by the WEA and then transferred for consideration by AWB's international unit, or AWBI, which holds veto power over all applications for bulk wheat exports.

 

AWBI regards its veto power as an essential element of the monopoly and usually rejects all applications. It rejected two previous bulk export applications by Cooperative Bulk Handling.

 

Meanwhile, former federal minister Wilson Tuckey called for a financial audit of AWB, covering internal transactions between the parent company and AWBI. Tuckey claimed AWB has in recent years shifted costs between itself and AWBI to the detriment of growers.

 

AWB said the company would look into the allegations and after investigating them would take any appropriate action.