SYDNEY (March 18 2004): Negotiations were well advanced for on-selling four cargoes of Australian wheat rejected by Pakistan authorities, a Pakistani shipping official and the Karachi importer of the wheat said on Wednesday.

The four ships, carrying 150,000 tonnes of wheat, would most likely go to the Middle East and the Far East, a senior Pakistani shipping industry official told Reuters in Singapore by telephone.

"The cargoes will probably start moving in the next 48 hours. The deals with new buyers have almost been finalised," added the official, who declined to be identified.

The wheat shipment was rejected by Pakistan in the third week of February on the grounds it was infected by Karnal bunt disease, which is not harmful to humans but gives off a foul-smelling odour, a claim strongly denied by Australia.

Pakistani importer, Tradesman International, which now owns the wheat, told Australian Broadcasting Corp Radio it was costing almost 100,000 dollar a day to keep the wheat offshore, but did not disclose where it was likely to be on-sold.

Australian wheat industry sources and the agriculture department on Wednesday downplayed recent trade speculation that the wheat could be headed to Dubai.

Australia, which has carried out its own tests, denies the wheat is infected with the trade-crippling disease, but has said it may carry other fungal spores that do not affect quality.

A running dispute between the two countries over the wheat has led to a diplomatic row. Pakistan has ignored a request by Prime Minister John Howard for an independent test in a third country and the Australian government has twice called in Pakistan's high commissioner.

Australia, the second-biggest wheat exporter in the world, is trying to protect the reputation of its annual wheat exports, which earn around 4 billion Australian dollar a year (US $3 billion).

It has contacted overseas customers, reassuring them that Australia does not have Karnal bunt, which can halt trade unless it is backed by expensive certification.

"It's a...difference of opinion," Haroon Suleman, chief executive of Tradesman, said of clashing views on the wheat between Australia and Pakistan authorities.

"They have given their opinion, the Australian and French (testing) experts. They are very much convinced with their point of view (that the wheat is not infected)," Suleman told ABC radio.

"I think the same way. It is not a commercial dispute. The dispute is of a technical nature. Again we fail to understand why simple things cannot be resolved." An Australian wheat industry source said a decision had not been taken on where the wheat would be sold, despite reports from private traders in Southeast Asia and Europe that Dubai was a likely buyer.

Courtesy Business Recorder