June 21, 2005

Wheat prices in Australia should rise some 9 percent

Lower world production of wheat will possibly push up Australian wheat prices and help offset an expected lower crop.

According to the Australian Bureau of Agricultural and Resource Economics, production from both the EU and Russia are tipped to fall about seven percent. Along with a tightening supply in China, another major producer, prices in Australia are likely to increase nine percent to about A$218 (US$169.04) a tonne.

Still, this will not be enough to completely offset the drought-induced drop in production which will cut the national wheat crop by 21 percent to 16 million tonnes. Total exports are currently tipped to fall 11.8 percent to 14.8 million kg, with the value of exports expected to be down 2.1 percent to A$3.6 billion.