UPDATE 1-Australia to open wheat export system to all comers

(Adds statement by GrainCorp in paragraphs 13-15)

CANBERRA, March 5 (Reuters) - A new Australian wheat export
system will be open to any operator who can pass a standards
test, the government said on Wednesday, once the old monopoly
system run by the disgraced AWB (AWB.AX: Quote, Profile, Research, Stock Buzz) is ditched later this
year.

Wheat export licences, to be granted by new regulator Wheat
Exports Australia, will be given to groups who can prove they
are fit and proper companies, Agriculture Minister Tony Burke
told the Australian Bureau of Agricultural and Resources
Economics' outlook conference.

Australia, the world's No.2 wheat exporter, has been under
pressure from the United States, the No.1, for decades to drop
the export monopoly system to allow for more price competition.

Burke said a probity test, which will cover only the past
five years, will ensure wheat exporters abide by Australian law
covering United Nations sanctions against other countries.

The monopoly system, known as the single desk, is being
abolished after AWB was found to have paid $222 million in
kickbacks to the former Iraqi government of Saddam Hussein
between 1999 and 2003 to secure sales.

AWB's payments breached UN sanctions against Iraq and
continued until U.S.-led forces invaded Iraq to topple Saddam.

The system planned by the new Labor government will also
open up bulk wheat exports for the first time to U.S. groups
led by the world's biggest grains trader, Cargill Inc [CARG.UL]

Other international grains trading groups, potentially
including Swiss-based Glencore and Paris-based Louis Dreyfus,
could also apply to export Australian wheat, Burke said.

AWB is exporting from the recently-harvested 2007/08 wheat
crop as a monopoly for the last time. The new system should be
in operation from July 1, Burke said.

AWB spokesman Peter McBride said on Wednesday that the
company intended to apply for an export licence when the new
system was in place.

Louis Dreyfus executive and Grain Exporters Association
spokesman Alick Osborne welcomed Burke's announcement.

"We view it as a very positive step," he said, saying it
would allow for greater price transparency.

Major eastern Australian grains merchant GrainCorp Ltd.
(GNC.AX: Quote, Profile, Research, Stock Buzz), which has said it wants to enter the bulk wheat
export trade, also welcomed Burke's decision.

The new system would benefit growers by providing
competition between a number of companies for grain, chairman
Don Taylor said.

"This new regulatory system is a responsible move by the
government and will provide growers with the levels of
prudential protection they require as well as providing open
access to the port storage and handling facilities," he said.

There would be no limit placed on the number of groups
which could be granted wheat export licenses, Burke said.

Export licenses will need to be renewed every year and will
not limit tonnages or destinations, he said.
(Reporting by Michael Byrnes; Editing by James Thornhill)