CBH Australia says makes first bulk wheat export

SYDNEY, Jan 29 (Reuters) Western Australian grain group Cooperative Bulk Handling has made its first shipment of wheat to Indonesia, as the Australian government decides the future of a controversial export monopoly held by AWB Ltd. .

The CBH shipment, of 25,000 tonnes, left the group's Esperance Terminal in Western Australia on January 26, bound for Makassar port in Indonesia.

''For the first time in 68 years, growers have the opportunity to secure enhanced value for their wheat via alternative pathways to international markets,'' CBH Group chairman Tony Critch said.

The CBH Group was granted a licence in December by the government's Wheat Export Authority and by Federal Agriculture Minister Peter McGauran to export 500,000 tonnes of wheat to its Asian flour mills in Indonesia.

Australia is looking at the future of AWB's export monopoly after a ruling by a judicial inquiry in late 2006 that AWB broke United Nations sanctions against Iraq by paying 2 million worth of kickbacks to the former Iraqi regime of Saddam Hussein to secure sales.

Agriculture Minister McGauran holds special powers to decide on applications for wheat exports by groups other than AWB while another government-appointed panel studies the so-called single desk export system.

The Australian government is expected to decide around June on whether to keep, modify or scrap AWB's export monopoly.

CBH owns six flour mills in Indonesia, Malaysia and Vietnam through Interflour Group, a joint venture it owns with Indonesia's Salim Group, and has long wanted to export Australian wheat directly to the mills, rather than rely on AWB.

Critch said the decision to grant CBH a licence was the first step in reforming Australia's wheat marketing system.

McGauran also authorised the export of 300,000 tonnes of wheat to Iraq by Wheat Australia, a newly-formed consortium between eastern grains group GrainCorp Ltd. , South Australian barley exporter ABB Grain Ltd. and CBH.

REUTERS AKJ RK1018