The Hindu Business Line : Australia keen to sell wheat to Indian market

THOUGH India is not looking to import wheat in the near future, thanks to good stocks and projections of a record crop this year, Australia would try the Indian market, if there was interest from New Delhi. "We are keen to sell wheat to India, if they are back in the market," Mr Warren Truss, Minister for Agriculture, Fisheries and Forest, told a group of journalists in Canberra.

Australia, after a poor nine million tonne (mt) crop last year following its worst drought in 100 years, is expecting a record crop this year. India, too, is expecting a record 76 mt crop this year, thanks to widespread rains. India, which has turned a net exporter since the second-half of 2002, is comfortable with foodgrain stocks and is looking at nearby shores such as Bangladesh, Pakistan and West Asia to export wheat.

Though foodgrain exports have come to a standstill now, the shipments are likely to begin in April with a new grain export policy coming into effect. Under this, exporters will be able to buy wheat or rice directly from the growers and ship it before being reimbursed part of their transportation costs.

Australia, on the other hand, is not dependent on India for exports, though it had shipped the grain until 1998-99. Then, India signed to import two mt, but stopped after buying 1.5 mt. Flour mills in the South were in particular buying Australian wheat as it was far more cheaper than buying it from under FCI's open market sale scheme and having it transported all the way from Punjab or Haryana. However, a 50 per cent customs duty on wheat imposed in 2000 has discouraged imports.

"We will be happy to try the Indian market. We are prepared to look at India if it imports," said Mr Peter McBride, National Media Manager, AWB (Australian Wheat Board). Almost two-thirds of the wheat grown in Australia is exported. Indonesia and China are among the main buyers with Beijing recently signing up a deal to import one mt. Indonesia has also signed up to import large quantities and this may hurt Indian exports.

In view of Australia's poor crop last year, Indonesia had turned to Indian wheat for its flour mills. Indonesia flour mills import wheat to turn them into wheat products, mainly noodles. "Indonesia may buy Indian wheat but the requirement would be minimum. Say, to just blend with the Australian wheat. Otherwise, they will buy more of Indian wheat," an official of an Indian exporting firm said. However, one aspect that could worry Australia is that the AWB is under attack from countries such as Canada, Japan and the US, as it is the sole exporting agency of the nation.

AWB's single desk is different from other organisations that are sole importing or exporting agencies of their country. We are an independent agency and get no support from the Government. It is owned mainly by the farmers and our company is listed on the stock exchanges," Mr McBride said.

Wheat farmers hold 78 per cent of the shares in AWB, while retail investors and institutions make up the rest. On the price front, Mr McBride said prices could decline to around A$160-A$170 level as more arrivals from Canada and Australia were expected in the next six months.

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