ABB also said an active, early marketing programme had enabled it to make top-up payments of between A$8 and A$15 a tonne across its 1998/99 season standard barley pools. Export sales continued to be hampered by the Asian economic crisis and ongoing financial difficulties in China, ABB said."Despite this, our export sales of malting barley have been relatively pleasing," said Simon McNair, Victorian state manager of ABB, which operates in Victoria and South Australia. He did not reveal tonnages of barley sold. But ABB had secured good sales of feed barley to Saudi Arabia, McNair said."The re-emergence of Saudi Arabia as a major buyer of feed barley has improved international prices since December and this has helped lift domestic prices somewhat," he said.

McNairsaid the domestic market for malting barley had improved during the past two months. Announcing the top-up payments, he said growers would receive a A$12 a tonne payment on all grades of feed, Parwan and Chebec malting and malting 3 barley.

McNair said A$8 a tonne would be paid on deliveries of all malting 1 and 2 grades, except Arapiles malt 1 and 2 which would receive a A$15 a tonne top-up payment.

The difference between malting and feed barley top-up payments reflected the firming in international feed barley prices. "The relatively poor prices for barley on the world market and lacklustre season last year have made an early return to growers extremely important," he said.

Meanwhile Australia's canola and oilseed trade was reeling as an outbreak of defaults, cancellations and rollovers of canola shipments added new injury to the unprecedented collapse in world prices. Up to 1,00,000 tonnes of Australian canola has been caught in the cancellation trap as China, Bangladesh and, some traders say,Pakistan refuse to accept deliveries as prices plummet.

The cancellations compound the earlier shock of an unprecedented collapse in canola prices, which have lost about one-quarter of their value in three months by plummeting to less than C$320 from around C$410 a tonne in mid-November.

Effects of the vegetable oils crisis spread throughout Australia's entire grains sector this week, pushing further down on wheat and sorghum prices which were already weak. Traders said that the rumours of cancellation of a US shipment of crude degummed soyoil to China through an Australian concern were also probably correct-although none contacted had firm details.Reuters confirmed through one trader several shipments of Australian canola, for both Bangladesh and China, had been cancelled, and that letters of credit for other deals were feared unlikely to be issued.

Australian traders said that the cancellations of deals by Bangladesh and China were by private traders rather than state-owned enterprises. They would notdivulge names.

Australian exporters who said they were not involved in deal cancellations included Cargill Australia, the Grain Pool of Western Australia, Queensland-based Grainco and several private traders. Traders named by others as victims of cancellations included the large Japanese trading house Marubeni Australia Ltd and German grains trader Toepfer. "There's been a lot of talk, a lot of claim, a lot of counter-claim, a lot of rumour, a lot of counter-rumour (on villains in the canola crisis)," one trader said. "There are problems in all markets now because of this unprecedented collapse in prices that obviously nobody saw coming," he said. "There are defaults...no two ways about it," another trader said.

This trader, from a major international trading house, said Pakistan was also involved in canola cancellations. A collapse in vegetable oil prices to about 20 year lows, or more, had placed the contractual integrity of a lot of transactions under threat, he said. He urged the industry as a wholeto stop "chucking daggers around" but to look at the big picture and recognise present prices as a short-term aberration.

It was absolutely impossible to estimate the total tonnage of canola around the world involved in cancellations, he said. This trader added, however, that as well as outright cancellations, some canola was being re-routed into other markets. Some positions were also being rolled into other months, for example March shipments being cancelled and rolled into April, May and June."You have to be very circumspect about what you call an outright default," he said, adding that China was the key to real defaults. Canola's price collapse has been sparked by a severe decline in vegetable oil prices globally. The US soybeans recently hit 23-year lows to set the eary pace on a combination of a bumper South American harvest and market talk about defaults on palm oil and other vegetable oil deals.