As part of its commitment to developing an international customer focus to the treatment of moisture in grain marketing, AWB today announced a trial through the limited introduction of a new segregation, High Moisture Wheat (HMW).
In making the announcement today AWB (International) Limited General Manager, Sarah Scales, said that the introduction of HMW is a limited trial, designed to support the work of the AWB’s National Moisture Taskforce and the further refinement of Golden Rewards programme.
“Difficult weather conditions this season have prompted a trial at selected sites this year to assist in gathering information and allow small scale market testing”, Ms Scales said.
“In undertaking this trial it is imperative we do not undermine the quality reputation of Australian wheat which has been built up over many years. In addition, we must manage the risks associated with receiving higher moisture grain.
“Last year AWB increased moisture receival standards to allow wheat to be received up to 12.5% with a 0.3% tolerance. The increase was dependent upon the use of Near Infrared Technology (NIR). This year, with uniform national adoption of NIR a controlled trial will allow collection of accurate data to support the AWB’s National Moisture Taskforce and work in further developing Golden Rewards.
“In order to manage the risk associated with receiving and marketing high moisture grain a number of conditions have been established. The segregation will be for wheat delivered against ASW receival standards, but will allow for moisture of up to 13.5%, measured using NIR technology (Infratech).
“The price offered for the HMW segregation will reflect the additional costs of segregation, storage, logistics and aeration as well as the discount received in the marketplace for higher moisture Australian wheat. Pool equity for HMW will be $224 per tonne (FOB, GST exclusive). Protein and screenings increments will apply as per AWB Golden Rewards,” said Ms Scales.
Ms Scales said AWB’s primary objective would be to manage moisture risk through this new segregation and to prevent overall market premiums for Australian wheat being undermined. The wheat must be received and stored in aerated storage to prevent any further deterioration in quality whilst in storage and Bulk Handling Companies (BHCs) will be required to out turn the wheat at the stack average.
“While our international competitors may out turn wheat at a higher moisture standard, Australia has developed a reputation for supplying high quality wheat to our international customers and we cannot compromise on this and risk premiums already obtained for Australian wheat overseas. This is reflected in the value of HMW.
“To suggest that Australian wheat should be out turned with higher moisture disregards the specific needs of our customers and would bring Australia back to the level of its competition.
“As a trial, there will be no guaranteed access dates for receiving wheat into the segregation and while AWB has nominated some preferred sites for receival, this will need to be managed by the BHCs,” Ms Scales said.
Ms Scales said the domestic market remains concerned at receiving high moisture wheat and as such, the trial will be limited to receiving wheat in geographical regions that have primarily an export focus.
“This will help allay the concerns of the domestic market, while allowing us to test the international market’s capacity to absorb a higher moisture product from Australia,” Ms Scales said.
“By gathering accurate information, working to establish accurate market signals for higher moisture wheat and gauging the capacity for storage operators to manage quality, this will assist us in exploring options for payments based on moisture under AWB’s Golden Rewards.
“This is a limited trial for this year only and in no way represents a relaxation of AWB’s wheat receival standards,” said Ms Scales.
AWB is currently working with BHCs to establish HMW segregations where the specified conditions can be met and the associated risks effectively managed.