Wheat falls $14 tonne

Press, 1 February 1986, Page 2

Wheat falls $14 tonne

The strengthening New Zealand dollar has reduced the Wheat Board’s indicator price for next week $l4 a tonne to $259, which is below, the board’s guaranteed minimum price of $274 for the 1986 harvest. ;

During this week, the; Alls-, tralian standard white wheat quotation fell to SUSI 36 and the New Zealand dollar rose to a mark yesterday of 53 U.S. cents.

From February 1, tbe official start of a new wheat year,, the nominated ;price becomes the price to growers for wheat delivered W.the board. . ./ .

However, for .the 1986 harve&’titq board,-haS’ateo main-? tained a guaranteed ?mipimum price of; $274 a tonne, free on board or loaded at store, door, for 100 index quality millihg wheat. This Is the same' as the board’s standard milling price for wheat during 1985. But when the weekly nominated price system was first proposed, six months ago, the world price of wheat, translated to about $333 a tonne f.o.b. in New Zealand. It has fallen sharply since. The Government has decided that the wheat industry will be deregulated and during 1986 some interim measures will apply on the path to a free market in wheat from 1987 onwards.

Flour mills have been allowed to contract with growers, usually through agricultural merchants, for up to 50 per cent of their requirements to produce their flour quotas. The board, which also controls the movement of flour, has issued quotas for the flour from 285,000 to 300,000 tonnes of milling wheat. Mills appear to have contracted for most of their allowances, ac-

cording to the board, and therefore about 140,000 to 150,000 tonnes of wheat from the current harvest will -not be sold to the board.

For the rest of the 380,000tonne milling wheat forecast production, the board will pay $274 a tonne (for 100 index quality) or the nominated price during the week of delivery if that price is higher than $274. - The nominated ? price is determined by the average, in New Zealand' currency conversions, of the daily Australian standard white wheat quotations in the. previous week. The Australian Wheat Board quotations in turn directly reflect world prices for wheat.

From 1987, mills will be able to contract for all their wheat requirements and the form and functions of the Wheat Board are now being debated within the Industry. At present it is intended that the board will retain control over flour until the beginning of 1989.