Wheat exporter AWB has rushed a high-level delegation to India, after the country refused to unload 50,000 tonnes of Australian wheat that it claims contain unacceptable levels of pesticide.
In another blow to the embattled company, Indian authorities contacted AWB on the weekend with the quality concerns.
Customs officials at Chennai port, in southern India, are refusing to allow the cargo, which arrived from South Australia last week, to be unloaded unless it is cleared by further tests.
The 50,000-tonne shipment was the first consignment of half a million tonnes of Australian duty-free wheat due to be shipped to India in coming months. The contract is believed to be worth about $100 million.
AWB secured the tender with the Indian Government's State Trading Corporation in March, over companies from the US, Canada and Europe.
India, the world's second-biggest wheatgrower, is importing grain for the first time in seven years because local production can no longer keep up with the growing demand for wheat products by the country's ballooning population.
AWB spokesman Peter McBride said the delegation, which included the company's head of grain technology and quality assurance, was due to arrive in India today to meet authorities and perhaps even carry out their own tests.
Test results from samples taken before the wheat left Australia will also be reviewed.
"We take (India's) concerns seriously, and we'll obtain more information when they're over there," Mr McBride said.
"We're hopeful that we will be in a position to provide further details, later this week or early next week."
India's The Hindu newspaper reported that initial laboratory tests on samples taken from the cargo revealed more than the permissible pesticide content.
Further samples have been sent to the country's Central Food Technological Research Institute in Mysore. Sources told the newspaper that unless the tests cleared the wheat, there would be little option but to send it back.
The second shipment in the tender is expected to arrive in India later this week.
It has been a turbulent year for AWB, which is under investigation by the Cole inquiry for paying $300 million in kickbacks to Saddam Hussein's regime in Iraq to secure wheat contracts.
Federal Agriculture Minister Peter McGauran yesterday said the Government was helping to address questions arising from the testing of the shipment. He supported AWB's handling of the issue.
"Every sale is significant for Australian wheatgrowers, but given its size, this one is particularly important," he said.
"I look forward to a quick resolution of these matters."
The Grains Council of Australia was briefed on the situation yesterday. A spokeswoman said the group welcomed the company's speedy delegation to India to tackle the issue.
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