RI imports more Australian wheat

RI imports more Australian wheat

SYDNEY (Reuters): A new deal for Australian wheat with
Indonesia, even though the country remains one of Asia's hardest-
hit economies, brightened an otherwise threatened and dreary
Australian grains market last week.

The Australian Wheat Board's (AWB) announcement that
Australian wheat would be used to commission a new Indonesian
flour mill in Semarang, northeast of Jakarta, marked the
beginning of a likely continuing new market.

It came as Indonesia's position as one of Australia's main
wheat markets remained firm, despite the financial turmoil which
has rocked the country and as its wheat import system is shaken
by major changes required by the IMF.

A spokesman for the AWB told Reuters on Friday that the
Indonesian market continued to tick along as normal despite the
country's financial problems. It was performing in line with
expectations, with Indonesian import prices in line with softer
world wheat prices generally.

Against this background, commissioning of PT Sriboga Raturaya
Flour Mill's Semarang mill with Australian wheat made the mill
the AWB's third customer in Indonesia.

Until 14 months ago, PT Bogasari Flour Mills, Indonesia's
biggest flour milling firm and a member of the giant Salim group,
was the AWB's sole customer in the country through its monopoly
on flour milling.

PT Citra Flour Mill at Cilacap became the AWB's second
customer in Indonesia a year ago. Since then it has purchased
about 280,000 tonnes of Australian wheat.

Now the list is joined by the new Semarang mill, with a
capacity of 450,000 tons a year against Bogasari's total capacity
of four million tonnes.

Tim Dewan, AWB's Southeast Asian regional marketing manager,
said Friday that increased power for the Indonesian mills was
good for Australian trade.

"We've had very good relationships with the mills over the
years. To me it's a straight out positive," he said.

As a result of changes which involve the winding down of the
former state import monopoly Bulog, PT Bogasari, with its 25
years of operation, is expected to become more profitable and to
increase its market power.

Indonesia, Australian wheat's second-largest market, imported
just under 2.5 million tons of wheat worth A$500 million to A$600
million last year, giving Australia a 60 percent share of its
market.