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Thursday, 15 May 1969

Senator McKELLAR (NEW SOUTH WALES) (Minister for Repatriation) - In view of certain proceedings here yesterday, I took the opportunity of getting some information from the Department of Primary Industry concerning the sale of Australian wheat. At the outset, I would like to state in reply to the question of whether it would be in the interests of Australian wheat growers to disclose the extent of our sales of wheat to mainland China, that the answer is definitely no. I ask honourable senators opposite who are interjecting to wait for a moment and I will give the reasons for saying that.

Senator Little - Canada is prepared to disclose her sales.

Senator McKELLAR - The honourable senator has mentioned Canada. 1 would like to inform him that Canada does not publicise the price of wheat that she sells-

Senator Little - Canada supplied Senator McManus with the information.

Senator McKELLAR - If the honourable senator wants to ask questions, he can do so later and I will be prepared to answer them. I have a Press release by the Canadian Department of Trade and Commerce. Ottawa, Canada. It is dated 15th November 1968 and states:

The Minister of Industry and Trade and Commerce announced today the sale of 1.5 million long tons of Canadian wheat to China -

The Minister states clearly the amount that was sold. The Press statement goes on:

.   . five per cent more or less, of wheat to be shipped between December 1968 and July 1969

.   . This contract is under the provisions of the Third Long Term Agreement with China and consists of No. 4 Northern and No. 5 Wheat and limited quantities of garnet and winter wheat. Assuming that full tolerance is taken, the seals amounts to 58.5 million bushels. Including tha contract covered by this announcement, total sales under the Third Long Term Agreement amount to 6.3 million tons, or approximately 235 million bushels. The Long Term Agreement provides for a minimum of 168 million bushels and a maximum of 280 million bushels over the 3-year period commencing 1st August 1966.

Senator Cavanagh - At what price?

Senator MCKELLAR - The Press release states:

As in the previous contracts payment terms for sales under the Long Term Agreement are 25% cash when each vessel is loaded and the balance of 75% in 18 months, with interest. The deferred payment provision is made possible by a guarantee to the Canadian Wheat Board by the Government of Canada. I extend to the Canadian Wheat Board most sincere congratulations on this successful sales effort.

There is no mention of price. The actions of the Australian Wheat Board in this connection have been on a par with those of other wheat exporting countries. I put it. to honourable senators again that it would not be in the interests of Australian wheatgrowers, particularly at this time when we have a record crop and the Australian Wheat Board is already experiencing enough difficulties in negotiating overseas sales of Australian wheat, to disclose the prices of our sales of wheat to mainland China. Sales of considerable quantities of wheat have been effected. It has been alleged that wheat has been sold to mainland China at lower prices than to some other countries. In some instances this is correct. One reason for that practice is that mainland China is in a position to buy wheat all the year round. Therefore she buys on a buyer's market. This is good business and I think we must respect China for that. On the other hand, India has been the recipient over the years of gifts of large quantities of wheat. Australia has made a gift to India of a large quantity of wheat. But when India comes to buy wheat, as a rule, it is at a time of the year when stocks are lower than normal and it is not a buyer's market but a seller's market. Consequently India has to pay a higher price for the wheat. Mainland China is in a different position, as I have pointed out, because she can judge the best time to buy wheat. As I understand it, this is the main reason why the prices received from mainland China for our wheat are sometimes lower than the prices received for sales of our wheat to other countries.

I remind honourable senators that in 1966-67, when we had about 432 million bushels of wheat to sell, China took about 34% of our total exports. In respect of most commodities, if you are selling to a very large buyer - 1 do not say this has happened but ii is usually the case - you can sometimes shade your selling price a little. There is much more information that I could give to the Senate, but I merely repeat very strongly that it would, not be in the best interests of the Australian wheat grower to do what has been suggested. I am sure that the by-election for the Division of Gwydir will go very much our way because of the suggestion made yesterday.

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