November 9, 2006

AWB clings to wheat export monopoly

Embattled Advertisement Australia (AWB) has been clinging to its wheat export monopoly rejecting applications for bulk export licences.

AWB said the decision was made in the financial interests of wheat growers, but grain consortium Wheat Australia warned it could jeopardise Australia's lucrative wheat trade with Iraq.

The Wheat Export Authority (WEA) was advised on Wednesday, Nov 7 that AWB had rejected a dozen separate applications for export licences to eight international markets.

AWB--currently being investigated over its payment of US$290 million in kickbacks to the former Iraqi regime of Saddam Hussein had the right to veto applications by other companies to export wheat.

The company was forced to give up the said right to allow Wheat Australia to make a US$90-million sale to Iraq earlier this year, owing to mounting pressure from the Howard government. But Wheat Australia's application to export 500,000 tonnes of wheat to Iraq next year has failed along with 11 other applications.

Wheat Australia, a consortium of grain handlers ABB, CBH and GrainCorp, warned the decision could diminish Australian wheat growers' access to the lucrative Iraqi wheat market.

The AWB however, pointed out that it rejected the export applications to protect the financial entitlements of wheat growers who were delivering into the organisation's 2006/07 national pool.