Australia eyes non-AWB wheat

Wheat Australia said on Friday it would seek grain from sources other than AWB Ltd for fresh sales to the key Iraq market, if the national exporter would not release supplies. Shipments from Wheat Australia's first sale to Iraq are about to begin, with a first load of 50,000 tonnes of wheat due to leave Gelling port late on Friday or Saturday.
The group said it remained keen for further sales to Iraq, which has suspended dealings with AWB. "Wheat Australia has a good commercial framework from which it can pursue future opportunities. If AWB won't come to the party. Wheat Australia needs to consider its options," spokesman Rhys Ainsworth said.
Wheat Australia was formed in March to export Australian wheat to Iraq after Baghdad suspended dealings with monopoly wheat exporter AWB while it was under investigation over allegations it paid $222 million in kickbacks to former dictator Saddam Hussein.
In a deal brokered by the Australian government, AWB agreed to supply 350,000 tonnes of wheat from its export pool to Wheat Australia to allow that group's first sale to go ahead.
Since then, Wheat Australia has said AWB refused to supply wheat for a June tender by Iraq; AWB has said it will decide on future supplies "at the appropriate time"; and industry sources say AWB is reluctant to release further supplies.
Wheat Australia's Ainsworth said on Friday it was too early to speculate where it might access wheat if AWB refused to supply, but there were "ranges of options".
Direct acquisition of wheat from farmers from the new crop, in competition with AWB, is an obvious source. Wheat Australia's first shipment of wheat to Iraq will arrive in the Middle East in three to four weeks' time as part of the tender, worth about $70 million, won by the group in May.
Shipments will continue into August, with at least six more ships required to transport the wheat, mostly from the eastern and southern ports of Newcastle, Gelling and possibly Adelaide.
Wheat Australia is a co-operative between eastern grains handler and trader GrainCorp Ltd, South Australian barley exporter ABB Grain Ltd and Western Australian grains handler and trader Co-operative Bulk Handling. All have ambitions to become long-term exporters of Australian wheat. Australia's wheat trade with Iraq once the jewel in AWB's crown has been further complicated by events in Baghdad this week.