January 25, 2005

Australia's AWB unfazed by EU wheat export subsidy plan

Australian wheat exporter AWB Ltd. isn't unduly worried by European Union plans to reintroduce export subsidies for wheat, Ryan McKinlay, a company spokesman, said Tuesday.

The company is waiting for more information about the E.U. export subsidies, such as the level of the subsidy and how long they will be in place.

"At this stage, we don't expect them to have a major short-term impact," McKinlay said.

The European Union's cereals management committee opened a tender Thursday for export refunds for 2 million tons of wheat. The subsidy - the first since June 2003 - will make E.U. wheat more competitive on world markets and help clear the inventory backlog from the large 2004 harvest.

A high euro rate vis-¨¤-vis the U.S. dollar has hampered E.U. wheat exports during 2004-05, an E.U. spokesman said last week in explaining the move to reintroduce what he said was a market management tool.

AWB operates a bulk wheat export monopoly from Australia.