Australia Plays Big in Asian Wheat Market
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Wheat accounts for the majority of Australia’s grain production. Australia produces just three percent of the world’s Wheat (about 25 million tons per annum) but accounts for 10-15% of the world’s 100 million tons annual global Wheat trade. There are various types of Wheat produced in Australia, including Australian Prime Hard (APH), Australian Hard (AH), Australian Premium White (APW), Australian Noodle Wheat (ANW), Australian Standard White (ASW), Australian Premium Durum (ADR), and Australian Soft (ASFT).
FAS/Canberra forecasts Australia’s MY 2022/23 Wheat production at 31 million tons after a generally good start at planting and the subsequent early growth phase. This forecast is 25 percent higher than the previous 10-year average and 1 million tons higher than the official USDA forecast. If realized, this would be 5.3 million tons lower than the record-breaking MY 2021/22 Wheat crop but still the fourth highest for Australia.
The eastern states have had above-average rainfall to date, and the forecast is for above-average rains in the coming months, which will support a solid overall national Wheat crop. Western Australia has also had an excellent start to its production season, but soil moisture is below average, and forecast rains are around average.
The harvested area is forecast at 13.2 million hectares for MY 2022/23, relative to the 13 million hectares for last year’s record-breaking production. Despite increases in crop production input costs for the MY 2022/23 crop, the high world Wheat prices encouraged a slight increase in the production area.
For much of Western Australia, rainfall has been at or below average and below that for the same period in 2021. Western Australia is a significant Wheat area, generating, on average, 37 percent of the national production over the last five years. The Wheat production outcome in this state has a substantial bearing on Australia’s overall production. The Bureau of Meteorology forecast for August to October indicated expectations of around average rainfall across Western Australia.
Australian Wheat Consumption and Export
FAS/Canberra forecasts domestic consumption of Wheat at 8.5 million tons in MY 2022/23, almost 1 million tons higher than the official USDA forecast. This is due to FAS/Canberra forecasting higher feed industry demand at 5 million tons while the official USDA forecast is 4 million tons. The beef cattle industry is a significant feed Wheat consumer and has broadly been enjoying excellent pasture production over the last two years, enabling a herd rebuild that resulted in an improvement in feedlot cattle numbers in MY 2021/22.
Strong pasture production is expected to carry through into MY 2022/23. This will encourage continued grass-fed cattle production and is expected to limit the growth in feedlot cattle numbers in MY 2022/23. As a result, a similar feed Wheat consumption of 5 million tons is anticipated for the forecast year as estimated for MY 2021/22.
Domestic consumption for flour milling is expected to remain unchanged from recent past years at 3.5 million tons in MY 2022/23. Consumption of Wheat for flour has typically only been increasing with population growth which is expected to remain relatively flat in the short term.
FAS/Canberra forecasts another big year of Wheat exports in MY 2022/23 at 24 million tons, down by 3.5 million tons from the prior year’s record export estimate, but if achieved, it would still be the third highest on record. The MY 2021/22 Wheat export estimate was at 27.5 million tons. Although the demand is vital for Australian grain and supplies are plentiful, logistical constraints are limiting even higher export volumes.
According to AgFlow data, China led the Australian Wheat export market with 5.3 million tons in Jan – Oct 2022, followed by Indonesia (2.8 million tons), Singapore (2.6 million tons), the Philippines (2.4 million tons), and South Korea (2 million tons).
Other sources: https://www.aegic.org.au/
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