CBH disappointed with wheat export decision

Perth-based grain handler CBH Group has signalled it will continue pushing for more deregulation of the wheat export market after the federal government granted only a small part of its application for an export licence.

Federal Agriculture Minister Peter McGauran awarded CBH a licence to export 500,000 tonnes of wheat, indicating a continuing cautious approach to deregulation of the wheat export market.

"I considered it in the public interest to grant CBH a permit for 500,000 tonnes," Mr McGauran said in a statement.

"Australian wheat growers will benefit from CBH's long-term commitment to securing markets for Australian wheat and its investment in downstream processing facilities."

CBH Group Chairman Tony Critch said the group - and farmers - wanted more from government, after applying for a licence to export 2.7 million tonnes.

"Over the past month, I have attended grower meetings throughout the state and it has been made very clear to me that Western Australian growers are strongly in support of greater choice when it comes to the marketing of their wheat," Mr Critch said.

"The only thing that appears to be preventing growers from having further choice and the opportunity to obtain greater returns for their product is the politics of wheat marketing in this country."

It is understood Mr McGauran has dozens of other applications before him, but he has said he will wait to see crop forecasts before approving further licences.

"I am awaiting further information about the size of the harvest before deciding on the other applications before me," Mr McGauran said.

"The size of the harvest is a relevant factor in my considerations.

"As we all know, the drought is biting hard again in grain-growing regions and the size of this year's crop is far from certain."

CBH's licence only allows for exports to mills in Vietnam, Malaysia and Indonesia in which the company holds a 50 per cent stake.

The Pastoralists and Graziers Association said the decision to allow CBH to export only 500,000 tonnes would hurt growers.

"It doesn't allow CBH to maximise its closed loop supply chain to the flour mills in Indonesia, mills owned partly by the grain growers of WA," PGA chairman Leon Bradley said.

"Even more damaging, it will eventually force export wheat into the AWB's national pool, which growers are determined to avoid."

A CBH statement is pasted below:

Giving Western Australian growers greater value and choice

The CBH Group today announced the opening of its 2007-08 Wheat Pool, following the approval of a 500,000 tonne bulk wheat export permit by the Federal Minister for Agriculture, Hon Peter McGauran MP.

CBH Group Chairman, Tony Critch said the CBH Group welcomes the Government's decision and their recognition of the benefits of CBH's direct link between its Asian flour milling investment and Western Australian growers.

"We are, however, disappointed that we did not receive a licence for the full amount of 2.7 million tonnes, as per our original application," Mr Critch said.

"Over the past month, I have attended grower meetings throughout the state and it has been made very clear to me that Western Australian growers are strongly in support of greater choice when it comes to the marketing of their wheat.

"Western Australian growers need choice. We don't have the luxury of a domestic market. In effect, South East Asia is our domestic market and growers supplying wheat direct to their mills in Indonesia, Malaysia and Vietnam has proven to be the ideal vehicle to help Western Australia growers maximise their returns.

"Last year, the CBH Group clearly demonstrated its ability to market wheat internationally and provide additional benefits to Western Australian growers through this direct relationship.

"Growers have since had the opportunity to reflect on the success of the CBH Group's 500,000 tonne bulk licence from last year where we were able to deliver an additional $15 million of value and are seeking to benefit again this season.

"The only thing that appears to be preventing growers from having further choice and the opportunity to obtain greater returns for their product is the politics of wheat marketing in this country," Mr Critch said.

Mr Critch said the 2007-08 Wheat Pool will be open to all grades of wheat. "We again expect significant demand for the Wheat Pool this harvest, despite the limited quantity granted in the export licence." Pool equities and further information on how to deliver to the pool this harvest will be released in coming days.