Wheat export monopoly AWB Ltd has rejected a bid by CBH Group to sell bulk quanitities of the commodity overseas, a move the Western Australian grain handler claims will cost farmers.
Wheat export monopoly AWB Ltd has rejected a bid by CBH Group to sell bulk quanitities of the commodity overseas, a move the Western Australian grain handler claims will cost farmers.
The AWB decision - as advised by CBH - comes at a time when Canberra is under renewed pressure to end AWB's control of bulk grain exports which many countries regard as anti-competitive.
CBH said it was offering farmers $10 a tonne more for premium quality grain aimed at new markets.
Below is CBH's announcement:
Western Australian grain growers who participated in the Interflour Premium Pool will miss out on an additional $10 per tonne following AWB International's veto of the CBH Group's bulk export licence application.
The Interflour Premium Pool's $10 per tonne premium was contingent on the Wheat Export Authority's (WEA) approval of CBH Group's bulk export licence application for 100,000 tonnes of wheat. AWB(I) holds the power of veto over all bulk export licence applications.
CBH Group Chief Executive Officer Imre Mencshelyi said he was extremely disappointed with the outcome and frustrated that the application had only been given token consideration and had not been reviewed on its unique merits.
"This is disappointing news for Western Australian growers who demonstrated their overwhelming support for this concept and who are now being denied the opportunity to capitalize on the extra value on offer by delivering to their own mills.
"Our application was unique in that it offered growers the opportunity to release value in their own investment by delivering wheat direct to their flour mills in Malaysia, Indonesia and Vietnam.
"While local Australian flour mills can source wheat for their own operations direct from growers, Western Australian growers are precluded from supplying to Interflour, only because the mills are located offshore.
"The 100,000 tonnes of Western Australian wheat would not have displaced Australian wheat currently sold by AWB into these markets, rather it was to replace wheat of non-Australian origin.
"The licence application was never about challenging the single desk. It was always about maximizing returns to Western Australian growers within the existing framework of orderly marketing."
Mr Mencshelyi said the CBH Group remained supportive of AWB's efforts where they can create value for growers.
"Unfortunately there was no role for AWB in the proposed transaction.
"While we are disappointed with this result, we are encouraged by recent Federal Government comments suggesting the need to review AWB(I)'s power of veto over bulk export licence applications.
"This would then allow Western Australian growers to take full advantage of their unique ownership of the supply chain and see increased returns flow back directly into their pockets."
