Australia wary of RI wheat importer's move

Australia wary of RI wheat importer's move

SYDNEY (Reuters): Indonesia would have no difficulty in finding alternative supplies of wheat if importers moved to ban Australian imports because of the crisis in East Timor, an Australian farm official said on Saturday.

Indonesian wheat importers had decided to cut back or halt purchases from Australia in another sign of worsening relations between the two countries, Indonesian newspapers reported earlier on Saturday.

"There is plenty of wheat around the world that they could buy," John Lush, president of the Grains Council of Australia told Sky News Television.

"Indonesia has been a very important market for Australia and has in fact taken two-and-a-half-million tons on an annual basis, so we'd be very disappointed if we lost that market," Lush added.

However, Lush labeled the press reports as "rhetoric" at this stage, and questioned whether Indonesia was prepared to "mix politics with trade" over East Timor.

Australian wheat exporter AWB Ltd said on Saturday said it was unaware of any cancellations in Indonesia orders so far but expected to have a clearer read on the situation on Monday.

"We are aware of the reports, but we do not know of any exports being stopped, AWB spokeswoman Kelly Broad told Reuters.

One of Indonesia's largest wheat importers, PT Sriboga Ratu Raya, has said it will stop buying wheat from Australia from October 1.

"Starting from October 1, 1999, we will shift our imports to countries outside of Australia, those which have friendly political relations with Indonesia," Sriboga chief Bustanil Arifin told the local press.

The Jakarta Post quoted Arifin as saying all Indonesian wheat importers had agreed at a meeting this week to stop buying from Australia.

Indonesia has accused Australia of overreacting to the violence in East Timor. Australia is leading UN forces trying to restore order to the territory and was among Western countries who pressured Jakarta to allow foreign troops in.

Indonesia has already suspended a security pact with its neighbor, and some major Australian firms have evacuated staff from Indonesia because of fears for their safety. Anti-Australia protests have been staged almost daily in Indonesian cities.

Indonesia ranks 10th among Australia's trading partners, with two-way trade valued at A$5.5 billion (US$3.6 billion) a year.

Australia's is the single largest exporter of wheat to Indonesia.