In early September the Australian Wheat Board cut its estimate of the benchmark wheat price to A$205 (US$160) per ton. The price downgrade reflects larger harvests in Australia, Argentina and Canada. There is also the possibility that Australia may be caught in the crossfire of a renewed export subsidy battle between the EU and the USA.
The Australian Wheat Board's revised estimate of the size of the wheat harvest is 19m tons, more than 1m tons above the previous estimate. It is also 200,000 tons above the estimate issued by the Australian Bureau of Agricultural and Resource Economics (ABARE). If achieved, it would represent the second biggest crop after the record harvest of 22m tons in 1983/84.
--and a row over wool exports
A rift has developed between Australia's largest wool exporter, Japanese- owned Itochu Australia Ltd and the Australian Wool Exchange (AWEX). AWEX, which is owned by wool producers, was established in 1993 to take over many of the responsibilities previously held by statutory authorities, including the operation of the world auction system and market reporting. Itochu claims that the AWEX board is dominated by seller interests and has disregarded the legitimate concerns of buyers. A number of exporters, including Itochu, have threatened not to renew their membership of AWEX. Technically, this would preclude them from bidding at AWEX auctions, at which around 80% of Australia's A$3bn wool clip is sold.