Wheat war could get ugly

22 Dec, 2005 07:00 PM
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MARKET analyst group Profarmer has predicted the wheat export war could get ugly, with graingrowers divided over Co-operative Bulk Handlingís (CBH) wheat export bid.

ProFarmer managing director Richard Koch said the CBH application to export WA wheat could develop into a dispute between the eastern states and WA.

ìIf AWB vetoed the application it would not go over well in WA, where parochial loyalties are almost tribal,î Mr Koch said.

ìIn an appealing trump card, CBH claims it can solve sourcing problems for its mills by providing WA wheat direct from its premium pool.

ìFrom the CBH point of view it makes no sense for them to acquire wheat which has been placed in the AWB pool before being acquired by CBH-owned Interflour mills.î

But Mr Koch said a green light for the deal would almost certainly encourage ABB Grain and GrainCorp to apply for export wheat licences.

He said the application and its timing appeared to leave AWB in a no-win situation.

ìAWB is distracted on a few other battlefronts at the moment and they might have trouble countering the CBH move in the middle of harvest,î Mr Koch said.

ìThe application will also test the credibility of the Wheat Export Authority.

ìItís all about appearances because if CBH gets the green light the single desk will look like it is weakening.

ìBut if itís disallowed it will seem AWB interests are being put before those of WA growers.î

The move has implications for the future of the industry with some pundits saying the application signals the beginning of the end of the single desk.

ìIt is politically incorrect to say so but CBH, ABB Grain and GrainCorp would probably all feel they were better off if the AWB wheat export monopoly was scrapped or made more flexible,î Mr Koch said.

ìThe AWB is no slouch when it comes to strategic manoeuvring but CBH has massive support in WA.

ìIt would be out of character for AWB to lift the bat and let a provocative challenger like this go through to the keeper.î

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