Solid start to pool distribution

19 Apr, 2006 08:45 PM
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AWB has made a solid start in marketing the 2005-06 pool, despite the drama surrounding the Cole Inquiry and the Iraqi boycott on its wheat.

Last week the exporter announced it would make a $397 million first distribution to growers who delivered to the 2005-06 pool, with AWB International general manager Sarah Scales saying the organisation was making good progress marketing the large crop.

AWB has not managed to make as many sales as at the same stage last year, with only 16pc of sales for the flagship Australian Premium Wheat (APW) grade executed this season, compared to 20pc at the same time in 2005, while for Australian Premium Durum (APDR), 23pc of sales have been made compared to 37pc last year.

However, the story is not as damning as it would appear at a first glance, with AWB marketing a much larger pool this year than in 2004-05, where drought dogged key production areas.

However, despite talking up AWB's progress, Ms Scales said the large pool would mean there was a long way to go until the sales program was completed.

AWB has made up somewhat for the Iraqi ban slapped on the organisation until the findings of the Cole Inquiry are handed down by making some sales to India and Iran, both who have been net exporters in recent years before being hurt by dry conditions this year.

Ms Scales said there have been also good sales to Yemen and Kuwait.

On the flipside, the Chinese buyers, so crucial in the world market, have been quiet, meaning global demand remains sluggish.

Looking forward, the northern hemisphere crop is going to be crucial.

There is a cloud over the US crop, with threats to key American production areas, with wet conditions through the Minnesota area and dry in the Kansas / Oklahoma areas in the south.

The next monthís weather conditions are likely to be crucial towards the overall position.

AWB has been assisted in its marketing by the fall of the Australian dollar.

The dollarís slide, tipped all last year, but not eventuating, has finally occurred in the last month, coming down to just over US70c before stabilising at just over US73c, making Australian wheat more competitive globally.

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