AWB International has used its veto power to reject a bulk export licence application from Co-operative Bulk Handling Group, protecting wheat growers delivering to the National Pool, while leaving WA wheat growers with few options.
AWB International has used its veto power to reject a bulk export licence application from Co-operative Bulk Handling Group, protecting wheat growers delivering to the National Pool, while leaving WA wheat growers with few options.
CBH announced five-year supply deal with its flour mills in South East Asia two days ago, with the arrangement reliant upon the company being stripped of its monopoly in light of the Iraqi kickbacks scandal.
CBH Group chief executive Imre Mencshelyi described the decision as an injustice for Western Australian wheatgrowers.
However AWBI chairman Ian Donges said the bulk export permits would not be consistent with the intentions of the Wheat Marketing Act or the AWB Constitution to maximise net returns to wheat growers participating in the national pool.
"In some cases, the bulk export permits were to countries where AWB has exclusive sales contract arrangements which maximise net returns to wheat growers over the long term and approving these permits woudl be of no benefit to National Pool participants," he said.
The full text of an announcement from CBH is pasted below
Western Australian wheat growers will miss out on an additional $50 million this harvest following AWB International's veto of the CBH Group's bulk export licence application.
AWBI's decision to veto the licence application for two million tonnes leaves Western Australian growers with little option other than selling their wheat to AWB for $20-$30 a tonne less than they would have received if the licence had been granted.
CBH Group Chief Executive Officer Imre Mencshelyi described the decision as an injustice for Western Australian growers.
"The decision to reject our licence is another example of AWB's commercial interests and the interests of B-class shareholders being protected at the expense of Western Australian wheat growers.
"In a season when the federal government is spending millions on drought assistance, it is incomprehensible that AWBI is able to turn its back on $40-50 million of value for Western Australian wheat growers.
"This is the most graphic demonstration yet that Australia's wheat marketing arrangements are no longer operating in the best interests of Western Australian growers.
"A system where the market regulator is also monopoly market participant is no longer acceptable in today's business environment. The CBH Group continues to call for a properly constituted Wheat Export Authority to have the ability to objectively preside over this type of licence application."
Mr Mencshelyi said that growers were voting with their grain this year with more than 75% of the wheat delivered so far going into either warehousing or to the CBH Group Wheat Pool.
"Growers are clearly demonstrating their strong concern about the ability of AWB to maximise their harvest returns, irrespective of the rhetoric we have seen from the AWB and their affiliated groups.
"Following the enormous amount of support we have received from growers throughout Western Australia, we will be re-submitting our application, in line with our recent announcement of a five year supply agreement with Interflour.
"Given the uncertainty that growers currently face as they harvest their wheat, we will be waiving our $0.45 per tonne warehousing charge for wheat deliveries up to the 15th of December 2006.
"These are difficult circumstances for growers. By waiving our warehousing fee until December 15, 2006, we aim to provide those growers who are concerned at putting their wheat into the National Pool this year with a short-term alternative.
"We would strongly suggest that growers continue to deliver their wheat either to the CBH Group Wheat Pool or to warehousing, until we have investigated all possible options to ensure Western Australian growers are not disadvantaged."
