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AWB today announced that it would not commence foreign exchange hedging activities for the forthcoming 2007 wheat harvest due to the current uncertainty around wheat marketing arrangements.
AWB Managing Director Gordon Davis said as a result, AWB is only able to issue an unhedged Estimated Pool Return for the benchmark APW wheat pay grade of between $245 - $255 per tonne (FOB GST exclusive), and an unhedged EPR for durum pay grade APDR of $250 - $260 (FOB GST exclusive).
“The opening estimate reflects the outlook for a competitive wheat market in the year ahead, combined with a strong Australian dollar,” Mr Davis said.
“It is normal practice for AWB to commence hedging activities in late February on behalf of the National Pool for the forthcoming harvest.
“It is not wise for AWB to start a hedging program whilst there is no certainty as to the nature of future pool arrangements and therefore the underlying exposures that need to be managed.
“In light of this decision, growers should consider the existing alternatives to secure hedge protection for their expected seasonal production.
“AWB RiskAssist, among others, offers a price risk management service to growers specifically for this purpose. Our RiskAssist business tailors hedge management strategies to meet the requirements of Australian grain growers and AWB's regional grain marketing salesforce can provide growers with the products and strategies that will provide wheat futures and options as well as foreign currency protection, until such time as the National Pool commences its hedge program,” Mr Davis said.
Media contact: Peter McBride on 03 9209 2174 or 0417 662 451