December 8, 2005

 

Australian wheat export regulator finds AWB outperforms
 

 

Australian regulator Wheat Export Authority has reported that bulk wheat export monopoly operator AWB Ltd. outperformed industry benchmarks in selling the 2003-04 crop.

 

AWB's International unit, which operates the monopoly for the company, "continued to produce overall positive results in its management" of the collective export sales pools, the authority's Tim Besley said in a report to growers being distributed Thursday.

 

AWB(I) achieved a silo equivalent price of A$207/tonne, up about 8.6 percent from a Wheat Industry Benchmark, he said.

 

The benchmark is based on a basket of wheat, primarily of US grades, set each year by an independent consultant.

 

The price achieved by AWB(I) exceeded prices achieved for comparable overseas grades on the same day by US$7.68/tonne, while foreign exchange and commodity pricing risk management produced positive results, he said.

 

That said, inflation-adjusted returns to growers have decreased and are expected to fall further given a long-term decline in global wheat prices, and the emergence of non-traditional exporters, he said.

 

The Wheat Export Authority's two main functions are to control non-AWB(I) exports of wheat in bags and containers, and monitor and report on AWB(I)'s performance in exporting wheat and report on any benefits to growers from this arrangement.

 

National wheat production rose sharply in the crop year ending Mar 31, 2004, to 26.1 million tonnes from a drought reduced 10.1 million tonnes previously, the authority reported.

 

As a result, 19.9 million tonnes were delivered to AWB from the 2003-04 crop for sale through its export pools, up from 4.5 million tonnes from the 2002-03 crop, it reported.

 

In the fiscal year ending Jun 30, 2005, the authority received applications for wheat exports in bags and containers totalling 2.6 million tonnes, of which 1.1 million tonnes were approved and 272,760 tonnes actually exported, it said.

 

Often, there is more than one exporter vying for the same export opportunity, hence the significant difference between consented tonnages and actual exports, it said.

 

Non-AWB(I) exporters consistently apply for the most number of export consents for shipments to Vietnam, Myanmar, Bangladesh and Cambodia, it said.