News last update:6 Aug 2012

Australian grain monopoly blocks competition

The monopoly wheat exporter AWB has vetoed several applications by other grain handlers to export wheat. The West Australian company CBH and other groups had lodged applications with the Wheat Export Authority.

Every time AWB is exercising its legislative power to block the moves. CBH has raised the possibility of legal action on behalf of growers in West Australia.

The Chairman of AWB International, Ian Donges says the group wants to protect its pool participants, as well as long-term markets. He says four million tonnes is projected into the national pool and this is the lowest for some time. Donges says if large tonnages were removed the pool participants would need to bear extra costs.

CBH has applied for a licence to export two million tonnes. It has announced a five-year supply deal with flourmills it owns through a joint venture in Southeast Asia. CBH was offering growers an extra AUS$30 a tonne.

Other groups that had lodged applications also said they could get more money. But Ian Donges says introducing competition would drive prices down. Donges says it doesn't make sense to have multiple export permits going into markets currently served by AWB.

But CBH Corporate Affairs Manager Reese Ainsworth says its bid was all about getting value for growers. CBH is thinking of legal action. "So we'll be looking at legal options, we'll be looking at talking to government. I think the overwhelming response we've had from growers so far is that they're supportive of what we're doing and I think we have an obligation to follow up on their behalf", Ainsworth said.

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