PlanetArk 7 Apr 08;
TOKYO - Australia has demonstrated that it is a reliable, global supplier of wheat and other food, despite up to seven years of drought that has cut deeply into crop production, Agriculture Minister Tony Burke said on Friday.
The droughts, particularly bad in the past two years, have prompted concerns within the food industry in Japan, which is heavily dependent on imports, about the reliability of Australia as a stable supplier.
"In that time, at no stage have we failed to reach our international contracts, and as a strong, long-term stable supplier even in that context will continue to go to deliver our contracts," the minister told reporters, when asked about the concerns in Tokyo.
The Australian crop has bounced back this year, and is forecast to double to a record 27 million tonnes in 2008/09, but particularly bad droughts there over the past two years have contributed to international shortages causing prices to spike to record highs.
Key May wheat futures on the Chicago Board of Trade were trading around $9.33 a bushel in Asian trade, compared with the previous day's close of $9.37
Australia, which has a 15 percent share of the world wheat trade, is the second-biggest exporter of the grain after the United States.
Burke said that technological measures had also been taken, including steps to decrease loss in soil moisture from croplands.
"These sorts of changes in technology in planting methods are making sure that even though we face some ... challenges, we are able to ... live up to our long-term contracts," he said.
This year, good early rains in eastern Australia ahead of planting in April and May have greatly improved the outlook for the nation's harvest.
Burke also said he reassured Japanese milling and flour industry officials in a meeting on Thursday that Australia's new wheat export system would not jeopardise quality control, as some of them had feared.
Australia is in the process of introducing a new wheat export system, after it decided to end a 70-year monopoly on wheat exports by AWB Ltd following the discovery that AWB paid $222 million in kickbacks to the former Iraqi government.
Under the new system, wheat export licences will be granted to appropriate groups if they pass a standards test.
Burke said he could not comment directly on the issue, which was still going through a parliamentary process.
But he added that opening up the export business meant more competition, which would benefit buyers.
"First of all, by having a competitive market it puts a greater incentive than ever for somebody who is supplying wheat to make sure that they are providing a premium-quality product because buyers have the choice to not deal with them, a choice which previously was not available in the Australian wheat market," he said.
He said traceability would also be in place down to the farm level. (Reporting by Miho Yoshikawa; Editing by Chris Gallagher)
