SYDNEY, Australia – Large tonnages of newly harvested barley are being
smuggled across an Australian border into a recently deregulated state
for export by private traders.
As Australia’s annual barley harvest gets into swing, growers are
driving the grain from South Australia into Victoria to cash in on a
$15 Aus a tonne premium being paid by the private trade.
This contravenes legislation in South Australia, which prohibits the
export of the state’s barley by bodies other than the holder of the
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export monopoly, ABB Grain Ltd., the former Australian Barley Board.
However, there is no law against the transport of barley into other
states. The Australian constitution specifically guarantees freedom of
interstate trade.
ABB lost its export monopoly in Victoria on June 30 with deregulation
of the market by the state government.
ABB, however, retains a monopoly on the export of barley from South
Australia. With state-granted export monopolies for barley in
Queensland, New South Wales and Western Australia held by various other
bodies, the smuggling of barley into Victoria has become a running
thread in Australia’s barley monopoly export system.
Another nick to the system came with a deal to form a grain marketer by
United States grains giant ConAgra Foods Inc. and Grainco Australia
Ltd., which holds the barley export monopoly for Queensland and New
South Wales states.
A well-connected trader said Dec. 28 that no exports of barley by the
private trade from Victoria had taken place yet.
“But they will take place, there is no doubt about that.”
Traders cannot accurately tell how much smuggled barley has crossed the
border, but one described it as “a fair bit.”
The South Australian farm newspaper The Stock Journal put the premium
in Victoria over South Australia at $10-$20 Aus a tonne.
ABB had no comment. In the past ABB’s managing director Michael Iwaniw
has denied the existence of market differentials between the states
that would cause barley to cross borders.
ABB’s commercial general manager Simon McNair was quoted in The Stock
Journal as saying that price patterns between the two states reflected
a domestic supply and demand.
Private traders have said the deregulation in Victoria is showing what
export prices are worth. Australia is one of the world’s main barley
exporters.
