Australian wheat exports decline amid rising competition

Australia's wheat shipments have slumped amid increasing global stockpiles and competition from lower-cost grain suppliers.

Shipments in April were 1.1 million tonnes compared with 1.6 million tonnes a year earlier, a report on the Australian Bureau of Statistics website showed today. Exports also dropped from 1.4 million tonnes in March, according to the data.

Wheat futures dropped 27% in the past 12 months as global supplies gained. Australian producers are competing for overseas markets amid rising competition from lower-priced rivals such as Russia, the third-biggest shipper.

"Going forward we still are expecting a sluggish pace of exports if Australian wheat continues to retain this premium that it has," Commonwealth Bank of Australia commodities strategist Luke Mathews said today by phone from Sydney. "What it's going to result in is a higher-than-expected build in Australian wheat stocks this year," he said.

Wheat for July delivery on the CBOT was little changed at US$4.36 a bushel at 3:21 p.m. Melbourne time. That converts to US$160 a tonne, based on Bloomberg calculations. Milling wheat for July delivery on the Australian stock exchange traded at A$208 (US$170) a tonne. August delivery wheat closed at EUR 132 (US$158) a tonne on the NYSE Liffe in Paris on June 4.

Exports in the first seven months of the marketing year started October 1 were 7.7 million tonnes, about 8% below the year-earlier pace of 8.4 million tonnes, based on data from the statistics bureau.