Posted on July, 11, 2019 at 10:59 am
By Arvin Donley
CANBERRA, AUSTRALIA — Despite an ongoing drought throughout much of Australia, wheat production is forecast to rise 23% to 21 million tonnes in 2019-20, thanks to an increase in planted area and some timely rain in several key producing regions, according to a July 9 Global Agricultural Information Network report from the U.S. Department of Agriculture (USDA).
However, the projected wheat output is 13% below Australia’s 10-year average, and the country is having to import wheat from Canada for the first time in more than a decade. The USDA said some wheat already has arrived for milling and further permits for additional imports have also been issued.
Australia, the world’s fourth largest wheat exporter, will have less exportable wheat available for the foreign markets it traditionally serves, the USDA said.
“With the reduced exportable supply, there has been a dramatic decline in exports to some key Australian markets,” the USDA said. “While exports to more premium markets such as Japan and South Korea have remained steady, shipments to other more price-sensitive markets such as Indonesia have dropped sharply as a result of higher Australian prices.
“For Indonesia, lower Australian shipments have been largely offset by greater shipments from Argentina and Canada, while imports from other key suppliers have remained relatively steady. In fact, although Indonesia is traditionally always Australia’s largest import market, during the first eight months of the marketing year both South Korea, Japan and Philippines have purchased more Australian wheat than Indonesia.”
In its June crop report, the Australian Bureau of Agricultural and Resource Economics and Sciences estimated wheat area to expand 8% from 2018-19, with wheat area expected to increase in every major wheat-growing province except Western Australia, where some area is shifting to barley.