$1b for AWB pool

Australian wheat marketer AWB last week announced a record return to growers who participated in the 2003-2004 AWB National Pool of wheat sales.

AWB said last week the $1.07 billion distribution takes the total paid to-date for the 2003-2004 AWB National Pool to more than $3 billion.

A spokesman for AWB said more than 40 per cent of the recent payment would go to Western Australian farmers, who recorded a bumper wheat harvest last year.

Following the national payment, pool participants will have received about 75 per cent, on average across all pay grades, of their Estimated Pool Returns (EPRs) for 2004-2005. 

AWB International general manager Sarah Scales said the record distribution was due to significant sales that allowed AWB to distribute pool proceeds earlier than normal.

“We have sold and shipped a very significant proportion of what were near record pool volumes, and we are on track to have carry out volumes down to low levels by the time harvest gets under way in most states,” Ms Scales told WA Business News.

Despite the decline in the international wheat price pool participants had benefited from AWB management strategies to protect pool value, she said.

Ms Scales said a large proportion of the pool had been hedged.

“Our active pool management, which includes physical sales as well as our commodity and currency hedging program, has kept the 2003-04 EPRs steady in recent months despite a decline in world wheat prices,” she said.

One or two distribution rounds remain from the 2003-2004 AWB National Pool.

AWB says the next distribution is due at the first half of January next year, with a final distribution in April 2005.

Meanwhile, news reports suggest a record 2004-2005 world wheat crop is almost certain, with 615mt already harvested globally – 64mt more than the same time the previous year.

The US is expected to produce 58.9mt of wheat in the 2004/005 season, 26.5mt of which will be exported.

AWB is predicting an above average harvest.

While it will not be as good as last year’s record harvest of 25mt, AWB is expecting between 21mt and 24mt of wheat.

The Australian Bureau of Agricultural and Resource Economics expects the value of grain and oilseed exports to rise from $5.7 billion in 2003-04 to $6.3 billion in 2004-05 despite the higher world wheat production leading to lower prices.

Last month ABARE said lower wheat prices were being offset by growing demand from places such as China.

Iraq is another market to which grain sellers such as Australia and the US are looking to make up for falling prices.

Australia, the second-largest wheat exporter in the world after the US, is competing head to head with the US for Iraq’s import market of around 3mt.

Last week AWB announced it had been successful in a bid to supply 1mt of wheat to Iraq in a deal reported to be worth $300 million. 

But despite this success a cloud remains over one AWB’s biggest export markets much closer to home.

Indonesia’s biggest flour mill, Bogasari Flour Mills, which reportedly purchased 1.3mt of wheat from the AWB last year, has been indicating it may possibly look elsewhere for its wheat because of what it claims has been unfair treatment by the Australian Government.