AWB has opened a pool contract offering wheat growers an early commitment premium of $10 a tonne.

The contract offer commenced on 16 August and will run until AWB reaches its tonnage limits, as part of AWB’s program to offer growers the opportunity to commit wheat to its pools in a strong market environment.

AWB General Manager Commodities, Mitch Morison, said the early commitment of tonnage enabled AWB to begin managing its pools far earlier than waiting for harvest deliveries.

“Our early commitment program allows us to build a pricing and hedging program during an important period of the year,” Mr Morison said.

“Through the ten dollar premium we transfer the value generated and captured from markets to those growers who are taking a risk by committing to AWB. It’s a good system, and those growers who deliver at harvest also benefit thanks to the established hedging program.

“The wheat market has become very volatile in recent weeks, which means increased risk and a huge challenge for the individual. In this environment pool marketing options can be very attractive due to the spread of sales; it’s very much part of the certainty, simplicity, transparency and performance that growers have told us they want.

“In a year like this, pools would seem an ideal component of a broader marketing strategy, so we encourage growers to fully investigate the available options,” Mr Morison said.

AWB’s EPRs have recently increased substantially, lifting APW wheat to $339 a tonne and ANW1 noodle wheat to $354 a tonne in the Western Pool and APW wheat to $333 a tonne in the Eastern Pool (FOB, excl GST).

Key features of AWB’s 2010/11 season early commitment pools offer include:

• Early Commitment Premium of $10 a tonne premium to the final pool return
• A maximum washout fee on contracts of $30 a tonne
• Contract tolerance of +/-10% on contracted tonnage
• Distributions guaranteed to occur in April 2011, July 2011, October 2011, January 2012, with aim to finalise by April 2012
• Greater certainty and simplicity with both the AWB Loan and Advanced Payment funded at 70% of the Nominated Estimated Pool Return less estimated costs.

AWB encourages growers to check the AWB website and familiarise themselves with the terms and conditions for its 2010/11 season wheat pools, before entering into wheat supply contracts.

AWB media contact: Ian Desborough 03 9209 2335 or 0418 853 881.

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