December 22, 2006

 

Australia approves wheat export not handled by AWB
 

 

Australian Agriculture Minister Peter McGauran Friday approved applications for two permits covering exports of 800,000 metric tonnes of wheat outside a monopoly operated by AWB Ltd. (AWB.AU).

 

Wheat Australia Ltd. will be granted a permit covering 300,000 tonnes to Iraq and unlisted Cooperative Bulk Handling Ltd. 500,000 tonnes to Indonesia, he said in a statement.

 

McGauran considered 46 applications for export permits but only two were in the public interest.

 

AWB, which has held a long-term monopoly over Australia's bulk wheat exports, was stripped of its veto over exports by rivals early December as part of a government response to its role in an Iraqi kickbacks scandal.

 

The veto power was handed to the minister for six months, during which time the government pledged to consult with growers about the long-term future of export arrangements.

 

Wheat Australia Ltd. a joint venture between Cooperative Bulk Handling, or CBH, GrainCorp Ltd. (GNC.AU) and ABB Grain Ltd. (ABB.AU), exported 360,000 tonnes of wheat to Iraq under a special permit earlier this year after Iraq suspended business dealings with AWB.

 

Iraq is an important market for Australia and continued supply into it is in the long-term interests of Australian growers, McGauran said.

 

CBH will supply Australian wheat to mills in a joint venture in Indonesia, he said.

 

Most wheat exported from the latest crop will be sourced from Western Australia, which did not suffer the ravages of drought to the same extent as eastern Australia.

 

McGauran also said he did not want to disadvantage growers who sell their wheat to AWB's export pool, so a condition of the two export permits granted is that Wheat Australia and CBH must contribute A$4/tonne to AWB for each tonne exported.

 

"The decisions taken by the government concerning this year's wheat crop have no particular implications for long-term marketing arrangements," he said.

 

The government will consult with growers in coming months about future arrangements, he said.