20000205

: AWB shows sharp side with sales

SYDNEY: The battlefield of AWB Ltd's first annual meeting on Thursday, where grower shareholders voted down all motions, blunted only one side of the Australian national wheat exporter's sword.

The grower rebellion against a staff and executive share scheme and against changes to AWB's constitution to allow it to list on the Australian Stock Exchange (ASX) did not extend to serious campaigns against the group's export monopoly.

On Friday morning as the dust settled, some AWB officials attributed the grower rebellion to the forthright way Australian farmers often go about the politics of their business.

Long simmering resentment against AWB on domestic issues of export pool prices and AWB's ability to dominate local markets would also have contributed to the grower revolt, analysts said.

But partial information on recent Australian international wheat sales which also emerged at the meeting highlighted further payoffs from AWB's monopoly export power, the sharp side of the same sword which sometimes arouses domestic resentment.

AWB chief executive Murray Rogers confirmed rumours in world wheat markets for weeks, that Australia had made significant new wheat sales to Iraq. These would follow 700,000 tonnes sold by AWB to Iraq in the last oil-for-food deal phase.

AWB, which has been declining to comment on Iraq sales since the end of January because of commercial sensitivity, declined to reveal details at the annual meeting in Perth.

But there is little doubt that the Australian exporter, which normally fills about 50 percent of Iraq's wheat demand, is retaining a strong presence in that country's market.

Sales pointers from the meeting indicate payoffs elsewhere.

"We had a breakthrough today in the Philippines," Rogers said. "We beat the Americans and took a bit of market share off them in noodle wheat ... we've at last broken through."

Tonnage was still undefined, he said. Australia sold 245,309 tonnes of wheat to the Philippines in 1998/99 to September 30, up from 27,485 tonnes the year before.

AWB chairman Trevor Flugge also said Indonesia was coming back as a wheat buyer, indicating more upside there.

Flugge went on to attribute a decision by the U.S. Department of Agriculture to extend its US$210 million GSM-102 export credit package for Pakistan to a maximum of three years from the previous cap of two years to earlier AWB success in the market.

Australia sold Pakistan 500,000 tonnes of wheat in December and another 500,000 tonnes in January.

ANNUAL MEETING DEBACLE SEEN A SETBACK NOT A DEMISE

AWB officials told Reuters on Friday that the voting down of motions on financial matters was a setback but no death blow to ASX listing plans.

Thursday's rejection of motions designed to make AWB compliant with ASX requirements meant a listing was unlikely before next year, officials said.

But the setback was not that serious, with votes defeating the motions reasonably close to allowing them to pass, they said.

AWB believed it may be possible to negotiate with the ASX so that it might not have to change its constitution to list, one also said. Constitutional matters under discussion were private, but AWB was "hopeful" it would list next year.

"We are very committed to working with our shareholders to grow this company. If that means reassessing and re-grouping then that's what we'll do.

"It's just going to take time," AWB's spokeswoman said.-Reuters