Examining AWB’s market power in the international wheat market

The Australian wheat marketing system has been through a number of stages of deregulation in recent years. However, the AWB still maintains the monopoly selling rights of Australian wheat exports. The AWB and its supporters justify the single desk by arguing that the monopoly power enables them to gain a higher price in the export markets. Opposition to the single desk argues that Australia does not produce enough wheat to influence prices. The objective of this study is to test the market power hypothesis by examining the quantity - price relationship of Australian wheat exports and the stability of this relationship over time using annual data from 1961 to 2000.