Australia Wheat Export: South Korea Shows 180% Growth


Jun 30, 2023 | Agricultural Markets News

Reading time: 2 minutes

After a record-setting winter crop in marketing year (MY) 2022/23, Australia is expected to produce a more subdued but strong grain crop in MY 2023/24. Favorable conditions around winter grain planting across most production regions of Australia bode well for the establishment and early growth of Wheat and barley in MY 2023/24.

FAS/Canberra’s forecast for Australian Wheat consumption in MY 2023/24 is 8.5 MMT, in line with the MY 2022/23 estimate. There is no change in livestock feed consumption anticipated, and Wheat utilized for milling is relatively stable from year to year. Most of the Wheat demand by the livestock industry is for beef cattle feedlots and, to a lesser degree, the dairy industry and the, swine and poultry industries.

Weather conditions for pasture production have generally been favorable over recent years, which has continued into the current autumn period, and fodder reserves are high. However, the forecast rainfall for the coming May to July 2023 period is for drier conditions which are cause for some concern. But the rainfall outcomes in the spring (September to November) in the temperate regions in the southern states and the wet season period (December 2023 to April 2024) for the sub-tropical and tropical areas of Queensland and the Northern Territory will dictate the demand for feed grains by the beef and dairy industries.

At this stage, it is too early to indicate the likely conditions during these critical periods, which could subsequently change livestock feed demand for the remainder of the forecast year. Feedlot capacity, in general, is rapidly expanding in Australia, which indicates that in the medium to long term, there will be a rise in Wheat feed consumption, but feedlot numbers are not expected to be vastly different in the forecast year.

Domestic consumption is expected to remain unchanged from recent past years. However, the Australian Government forecasts a significant increase in immigration to Australia in 2023 and 2024, which is expected to increase the population and may subsequently impact milled flour demand. The main impact on demand from the immigration growth is likely evident in MY 2024/25.

Australia Wheat Export: South Korea Shows 180% Growth

Australian Wheat Exports

The expected drop in Wheat exports is primarily driven by the forecast 10.2-MMT decline in production. Exports are not expected to fall by as much as production due to the higher-than-usual carry-in stocks, some of which are expected to be used due to the anticipation of continued firm demand for exports.

Australia has for many years had over 50 Wheat export destinations. Of these, there are five consistently big customers that, in recent years, have accounted for 55 to 70 percent of all exports. Over the last two years, Australia’s export volumes have increased to these top five export destinations. According to the AgFlow data, Australia exported 7.75 million tons of Wheat in Jan-May 2023. In May, the key markets were China (817,000 tons), the Philippines (215,450 tons), Indonesia (183,000 tons), and Singapore (113,000 tons). 

China is the largest export destination by volume and has grown rapidly over the last two years. So far, for MY 2022/23 (October 2022 to February 2023), 26 percent of overall Wheat exports have been to China, accounting for 3.2 MMT of the 12.7 MMT exported. In the same period for MY 2021/22, Wheat exports to China were 2.6 MMT and in the prior year only 1 MMT, and far lower in earlier years.

So far, for MY 2022/23, exports to South Korea have had the most significant growth by volume, up almost 800,000 MT and a percentage increase of over 180 percent from the same period in the previous year. Indonesia and the Philippines also showed strong growth as Wheat destinations for Australia.

Other sources: USDA

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