Voluntary Report - public distribution

**Date:** 4/21/2006

**GAIN Report Number:** AS6024

AS6024

**Australia**

**Agricultural Situation**

**Ag DownUnder Vol 6**

**2006**

**Approved by:**

![](media/image1.wmf)Kathleen Wainio, Agricultural Counselor

U.S. Embassy

**Prepared by:**

Kathleen Wainio, Agricultural Counselor

**Report Highlights:**

-   PRIME MINISTER HOWARD ACCUSES AUSTRALIAN WHEAT BOARD (AWB) OF
    DECEIVING GOVERNMENT, U.N.

-   DISCUSSION PAPER PROPOSES RADICAL CHANGES TO SINGLE DESK

-   CYCLONE REDUCES AUSTRALIAN SUGAR PRODUCTION

-   NEW PROTOCOLS OPEN DOORS FOR EXPORTS TO CHINA

-   KIWIFRUIT, CITRUS, TABLE GRAPE EXPORTS TO TAIWAN SET TO RESUME

-   JOIN THE USA PAVILION AT FINE FOOD 2006, MELBOURNE, SEPTEMBER 11-14

-   STRONG GROWTH PROJECTED IN SALTY SNACKS, MEAT SNACKS, BREAKFAST
    CEREALS

Includes PSD Changes: No

Includes Trade Matrix: No

Unscheduled Report

Canberra \[AS1\]

\[AS\]

# PRIME MINISTER HOWARD ACCUSES AUSTRALIAN WHEAT BOARD (AWB) OF DECEIVING GOVERNMENT, U.N. 

![](media/image2.png){width="1.0416666666666666e-2in" height="0.125in"}\
Prime Minister (PM) John Howard said during an April 19 radio interview
that the AWB deceived the Federal government over the Iraq oil-for-food
kickbacks, ![](media/image2.png){width="1.0416666666666666e-2in"
height="9.375e-2in"}"I believe that it is a pattern of behavior of AWB,
that not only set out to deceive the Government but also set out to
deceive the United Nations and indeed many other people and many other
organizations," the PM said. PM Howard, Foreign Minister Alexander
Downer and Trade Minister and Deputy Prime Minister Mark Vaile all gave
evidence to the Cole inquiry last week that they were unaware of the
bribes. ![](media/image2.png){width="1.0416666666666666e-2in"
height="9.375e-2in"}(The Australian Financial Review, April 19, 2006;
Farm Online Daily News, April 20, 2006)

# DISCUSSION PAPER PROPOSES RADICAL CHANGES TO SINGLE DESK

A controversial discussion paper on the future of the single desk wheat
export marketing system over the next four years was presented at Grains
Week 2006 in Canberra on April 5. The paper, commissioned by the Grains
Council of Australia (GCA), proposes that the AWB lose its power of veto
to a grower-owned and controlled company, 'Australian Wheat Associates.'
The company would replace the Wheat Export Authority (WEA) and would
have the ability to issue licenses to secondary exporters. The company
would also have the responsibility to market and promote Australian
wheat. GCA said the paper does not yet represent GCA policy, but is the
beginning of a national consultation process as the industry awaits the
conclusion of the Cole Inquiry into the conduct of the AWB under the
U.N. Oil-for-Food Program. The final report of the Cole Commission is
expected by June 30, 2006. (For further information see GAIN Report AS
6022)

# CYCLONE REDUCES AUSTRALIAN SUGAR PRODUCTION 

Australian sugar cane production is forecast at slightly lower levels as
the damage from Cyclone Larry is expected to have reduced production by
100,000 -- 200,000 MT. Projected exports for 2006/07 are also forecast
at below average levels and represent a significant decline from the
previous year, despite improved export prices. It should be noted that
it remains too soon to determine the exact level of damage from the
cyclone. Industry sources remain hopeful that much of the damage to
mills will be repaired by the beginning of harvest. Also, some areas
that were not affected by the cyclone received well-timed rainfall as a
result and are expected to see above average production in 2006/07. (For
further information see GAIN Report AS 6023)

# NEW PROTOCOLS OPEN DOORS FOR EXPORTS TO CHINA

On April 3, Australia signed two new quarantine protocols for the export
of Australian citrus and deer products. The Chinese market for citrus is
valued at \$A50 million and trade of oranges, mandarins, and lemons
could begin this season. The deer protocol formalizes exports of venison
and velvet to China, a market that has been identified as having future
growth potential. A protocol extending the current export arrangements
for wheat and barley for three years has also been signed. Australian
exports of wheat and barely to China are valued at about \$A350 million.
Australia is the largest supplier of malting barley to China, and the
third largest supplier of wheat. Progress has also been made on
approving 45 meat-processing facilities for shipping beef, sheep and
goat meat to China. Efforts are continuing to gain access to China's
tripe market. (Source: April 3 Media Release, DAFF06/19A)

# KIWIFRUIT, CITRUS, TABLE GRAPE EXPORTS TO TAIWAN SET TO RESUME

Minister for Agriculture, Fisheries and Forestry (DAFF) Peter McGauran
welcomed news that Taiwan had reinstated a protocol for exports of
Australian kiwifruit, citrus and table grapes. The market had been
closed since January 1, when Taiwan's earlier protocol lapsed due to
concerns over the Queensland fruit fly. McGauran indicated that
Australia is continuing efforts to re-establish a protocol that fully
reinstates the export of stone fruit to Taiwan. The Taiwanese market is
valued at over \$A700 million for Australian horticultural exports.
(Source: Media Release DAFF06/36PM)

# JOIN THE USA PAVILION AT FINE FOOD 2006, MELBOURNE, SEPTEMBER 11-14

Do not miss Australia's largest food trade show, *Fine Food 2006*, in
Melbourne, September 11-14, 2006. *Fine Food* attracts 30,000 'trade
only' buyers and decision makers, including representatives of the food
importing, distribution, retail, and catering industries. A large
proportion of Australia's major food processors and importers actually
exhibit at the show - an ideal opportunity to "walk" the show and meet
potential buyers one-on-one. For U.S. companies interested in marketing
their products in the Australian market, we believe that Fine Food is
the one show you should be in to 'meet the Australian market.'

FAS/Canberra is organizing a USA Pavilion at Fine Food 2006. Contact
Lindy Crothers at <AgCanberra@usda.gov> for further information. (For
further information see GAIN Report AS 6005)

**STRONG GROWTH PROJECTED IN SALTY SNACKS, MEAT SNACKS, BREAKFAST
CEREALS\
**\
The average Australian spends about \$A30 per person each year on salty
snacks and the category is growing. The salty snack grocery category is
worth \$A680 million, and represents the largest segment of the snack
food category. Category drivers include varying pack sizes, improved
packaging, new flavor choices and growing consumer health awareness.
Meat snacks are making steady inroads into the diets of Australian
consumers, with the segment growing to \$12 million. One familiar brand
is focusing on promoting its low-carb, 97 percent fat-free product.
Breakfast cereal is one of the top three dry grocery segments in
Australia and is known for its competitive intensity and innovation. The
current consumer trend toward health and well-being means more people
are making health conscious decisions, such as eating wholegrain
breakfast cereals. (Source: RETAILWorld March 6-17, 2006)

**Recent Reports from FAS/Canberra**

The reports listed below can all be downloaded from the FAS website at:
<http://www.fas.usda.gov/scriptsw/AttacheRep/default.asp>.

  ---------- --------------------------------------------------- ----------
  **Report   **Title of Report**                                 **Date**
  Number**                                                       

  6001       Fresh Deciduous Fruit Annual                        12/28/05

  6002       Ag DownUnder, Issue 1                               01/13/06

  6003       Health Claims & Sugar Content of Fresh Fruit        01/24/06

  6004       Livestock Semi Annual                               02/08/06

  6005       Fine Food 2006 Trade Show -- Australia              01/27/06

  6006       Ag DownUnder Vol. 2                                 01/27/06

  6007       Comment Period for Proposed Health Claims Standard  02/06/06
             Extended                                            

  6008       Tree Nuts Annual                                    02/09/06

  6009       Ag DownUnder Vol. 3                                 02/15/06

  6010       Cotton Quarterly Update                             02/24/06

  6011       Comment Sought on Feasibility of Extending Country  02/28/06
             of Origin Labeling                                  

  6012       Biosecurity Australia Begins Assessment of U.S.     03/08/06
             Stone Fruit for Import                              

  6013       The Corish Report: "Creating Our Future: Ag & Food  03/08/06
             Policy for the Next Generation"                     

  6014       New Guide Available for Country of Origin Labeling  03/09/06

  6015       AgDownunder Vol. 4                                  03/10/06

  6016       Cyclone Larry Affects Sugar Industry                03/21/06

  6017       Grain Annual                                        03/21/06

  6018       Fortification of Cereal-Based Beverages             03/22/06

  6019       Ag Down Under Vol 5                                 03/24/06

  6020       Stone Fruit Annual                                  04/03/06

  6021       AMP Mid-Year Review                                 04/12/06

  6022       Grains Week Features 'Discussion Paper' Proposing   04/12/06
             Radical Changes to Single Desk                      

  6023       Sugar Annual                                        04/13/06
  ---------- --------------------------------------------------- ----------