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Drought hits Aussie wheat profits

23 May 07 05:46 GMT

The severe drought in Australia has dented profits at the country's troubled wheat exporting business.

AWB saw its first-half profits fall 71% to 11.8m Australian dollars ($9.7m; £4.9m) from A$41.4 for the same period last year.

AWB is to be stripped of its export monopoly after being found guilty of paying kickbacks to Iraq in the 1990s under the UN's oil-for-food scheme.

AWB described the latest trading figures as "disappointing".

'Cutting cloth'

Australia has suffered its worst drought in more than a century and AWB said it would be reviewing the structure of its domestic trading operation.

"We will continue to cut our cloth to accommodate swings in seasonal conditions," said chief executive Gordon Davis.

"Our objective is to maintain a lower cost base and grow the company."

Mr Davis said the winter crop could be strong if current rains continued although no firm predictions could be made.

The government revealed on Tuesday that it would remove AWB's current monopoly status next year and allow competition into international sales of wheat, one of the country's most valuable exports.

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