AWB fiddles as growers await payments Friday, 9 March 2007
AWB Ltd has been challenged by Western Australian wheatgrowers to declare the equity and distribution status of its 2005/06 wheat pool, in response to rising speculation that the marketer intends to pay growers too little, too late.
Pastoralists and Graziers Association Western Graingrowers chairman, Leon Bradley, says 2005/06 had been a relatively good production season for WA growers, and free-on-board wheat prices had risen at least $40 per tonne in the 12 months after December 2005.
At the same time eastern states domestic wheat prices lifted by $100/t.
However, Mr Bradley says many WA growers have received as little as 60pc of their equity, depending on grade, in this pool.
And he says there are increasing concerns that the remaining equity will not only be well below expectation, but the payments to growers will be subject to further delays.
"WA wheatgrowers are budgeting now for next season and will be needing extra carry-on finance because they have yet to receive pool entitlements, that could be significantly below expectation," he said.
"Market analysts are estimating the AWB base pool price for 2005/06 of around $190 (FOB) is well below the price level of around $230/t (FOB) that should have been achieved by any competent marketer.
"Multiply $40/t over the 2005/06 harvest of 15 million tonnes and you come up with a shortfall in pool performance for that season of more than $500 million.
"It is now almost two years since growers seeded their 2005/06 wheat crop, yet they are being forced to increase their borrowings for carry-on finance because the AWB pool for that season has yet to be finalised."
Mr Bradley says the late, low return to growers for the 2005/06 pool is making WA wheatgrowers even more nervous about the status of the 2006/07 AWB pool.
