AWB International (AWBI) has advised the Wheat Export Authority it does not support the approval of three bulk wheat export permit applications to Vietnam, Malaysia and Indonesia in order to protect value for all growers who deliver into the AWB National Pool.
AWBI General Manager Sarah Scales said the applications to export 60,000 tonnes of bulk wheat to Indonesia, and 20,000 tonnes each to Malaysia and Vietnam, were carefully and thoroughly assessed individually on their merits and the decision was made in the best interests of the National Pool.
“They were declined on the basis that in our view the sales, outside the Single Desk system, would be detrimental to the interests and value of the National Pool,” said Ms Scales.
“Indonesia, Malaysia and Vietnamare all long term and important markets for Australian wheat growers and have been for over 60 years.
“In addition, they are all growth markets for Australian wheat producers in which AWB International is a major supplier.
“AWB International has significant sales already committed for Indonesia, Vietnam and Malaysia in 2006, and our view is that to allow these bulk shipments to proceed would undermine our ability to maximise net pool returns for all pool participants.
“These markets are critical to our long term strategy to increase sales into Asia to 60% of all AWBI sales with the aim of increasing returns to all Pool participants.
“AWBI’s sales program for the coming season will involve close to four million tonnes of high quality Australian wheat into these markets, including the same grades specified in the applications.
“The Single Desk allows AWBI to maximise the value of the product quality and freight advantage for Australian wheat growers. We must always weigh up possible short term gains for a few against the long term interests of all growers delivering to the National Pool.
To allow multiple sellers of Australian wheat to deliver into a mature market, which has a long history of successful engagement with the National Pool, can only be expected to drive down pool returns and cost growers money in the long run,” said Ms Scales.
Under the Wheat Marketing Act, AWB International has the responsibility of managing the Single Desk for wheat exports and maximising returns to Australia’s wheat growers. This includes the responsibility of assessing and determining whether a permit to export bulk wheat outside the National Pool should be approved.
“The reasons we’ve outlined for not approving these applications are based on principles of sound Single Desk management which are well known to growers and other pool managers and have strong support within the grains industry,” said Ms Scales.
“The system is designed to allow for exports by traders other than AWBI where the sales complement the AWB National Pool and therefore benefit all wheat growers.
“However these applications do not complement or enhance the current AWBI program for the marketing and sale of Australian wheat,” Ms Scales said.
Details of the significance of Indonesia, Malaysia and Vietnam to Australian wheat growers are listed below:
- Purchased 3.7 million tonnes of wheat from the 2004/05 National Pool
- Value of these purchases was in excess of $A800 million
- This represents more than 20% of National Pool sales
- AWB International has relationships with all major buyers in these countries dating back to the 1940s
For further information contact:
Peter McBride , AWB Media Manager, 03 9209 2174 or 0417 662 451
Paul Ryan, WA State Manager, 08 9318 8290 or 0429 856 883
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