Australia wheat harvest decline estimated at 10 pct

Australia is struggling with a third straight year of drought. Forecasts for the decisive spring vegetation period of 2019 promise lower than average rainfall and experts estimate wheat harvest in the country to be 10% lower from the previous forecasts not optimistic either, ZoL reports.

Wheat production in Australia is expected to fall below 19 mln t, down from 21.2 mln t under the June forecast of the Australian Bureau of Agricultural and Resource Economics and Sciences (ABARES). The situation is particularly complicated on the eastern coast of the country.

In 2018/19, Australia dropped to the 7th position among key exporting countries (3rd place in 2016/17 with a record wheat production of 35.1 mln t).

However, while Australia is suffering from a decline in wheat production, global production in the 2019/20 season may reach a record high of 768.1 mln t, under the USDA forecasts. Black Sea countries will benefit the most.

"Asian processors no longer consider Australia as a major wheat supplier as it used to be a few years ago. Prices for Black Sea wheat are attractive and the quality is constantly improving. Australia's absence from the market is not a serious problem," says a representative of one of the key milling companies in Southeast Asia.

Australian premium wheat is traded at a price of USD 250 per ton C&F Southeast Asia. Meanwhile, Black Sea wheat of the same quality is offered at a price of about USD 225 per ton C&F.

Earlier it was reported that the forecast for world wheat stocks had been lowered by nearly 5 mln t since July 2019, to 273.6 mln t, putting this season’s inventory level at 6 mln t (2.2%) above the previous season but still almost 10 mln t short of the 2017/18 record.