September 7, 2006

Australia's wheat crop this year may be half that of 2005

The wheat crop in Australia this year could be halved as dry weather withered crops, trader and corporate adviser Emerald Group Australia Pty said last week.

The nation's output of wheat in the October-to-January harvest may be as low as 13 million tonnes if current dry weather persists, said Emerald's Executive Director Mike Chaseling, adding that there would most likely be an increase in prices. The group is however forecasting a 16 million tonne crop.

Australia's wheat crop last year was 25.1 million tonnes. The country has just experienced its driest month on record.

Wheat prices have risen 24 percent this year as global production declined. Furthermore, this year, India resumed purchases due to production shortages. The country is expected to import at least eight million tonnes by the end of the year, becoming the world's largest importer.

South Australia, the third-largest wheat-growing state has cut its forecast for the coming total grain harvest by 30 percent this week.

AWB Ltd., Australia's monopoly wheat exporter, said Jul 27 drought may cut the nation's wheat harvest to between 18 million and 20 million tonnes.

Conditions for the next few months do not look encouraging either. Australia may have below-average rainfall and above-average temperatures in some parts of the nation in the next three months, according to the Bureau of Meteorology.

Global wheat production in the year ending June 2007 would be 4.1 percent smaller than the previous year, the London-based International Grain Council said last month. Dry conditions have also damaged crops in the US, Australia, Argentina and Europe.