The Australian government has shelved wheat export approvals for operators other than main shipper AWB Ltd until the size of the country's rapidly dwindling wheat crop becomes clear.
The return of Australia's worst drought in 100 years has cut the current wheat crop to around 15 million tonnes on latest forecasts 40 percent less than first forecasts and traders see further possible falls to 12 million tonnes. "I am conscious of the deteriorating crop forecasts and therefore the likely amount of wheat for export," Agriculture Minister Peter McGauran told Reuters through a spokesman.
Decisions would be taken on the basis of the likely amount of wheat available for export, he said. A total of 29 applications for exports from the 2007/08 crop not yet approved cover potential exports to 20 countries, Peter Woods, chief executive of the government-appointed Wheat Export Authority, told Reuters.
But intrigue haunts the approval system beyond crop concerns. Under new arrangements introduced last December, in reaction to the scandal over kickbacks paid by monopoly exporter AWB to the former Iraqi government of Saddam Hussein, McGauran alone has the power to approve or reject exports by groups other than AWB.
But only six applications have been approved from 111 lodged. Swiss-based trader Glendora, through its Australian operation Brooks Grain, has applied to export to Iraq but is finding approval elusive, according to a report in the Australian Financial Review this week. "We can't get a permit," Brooks Grain managing director Chris Brooks was quoted as saying.
McGauran's spokesman and Woods both declined to comment and Brooks could not be contacted. Many traders said the government is still protecting AWB from competition while it operates the official monopoly. But pressure is also building in politically sensitive rural electorates for the government to approve export applications before a federal election later this year. Three applications were approved last week for the export of 500,000 tonnes by Western Australia's Co-operative Bulk Handling to flour mills it owns in Vietnam, Malaysia and Indonesia.
Earlier approvals, for wheat from the 2006/07 pool, were for 500,000 tonnes to be exported by CBH to Indonesia, 300,000 tonnes to be exported by new group Wheat Australia to Iraq, and one other application, which has not been made public.
CBH spokesman Rhys Ainsworth told Reuters on Friday that it would apply to export more wheat, after reports that it wants permission to export 2.7 million tonnes. "There's been some overwhelming sentiment from growers, certainly in Western Australia, that they want to deliver to CBH," he said. CBH is one of the main opponents of Australia's export monopoly and has lobbied hard to export on its own behalf. Its argument is strengthened by Western Australia's status as producer of most of Australia's wheat exports.