November 7, 2003

Australia's 2003/04 Wheat Production Forecast at 23.5 Million MT
 

Australia's wheat production in 2003/04 is forecast at 23.5 million metric tons (MMT), up 700,000 MT from Post's previous forecast, and sharply higher than the drought-reduced 2002/03 harvest.  The production increase from Post's previous forecast is attributed to better than expected yield prospects in the States of Western and South Australia, where bumper wheat crops are forecast.  In major growing areas of New South Wales, dry conditions at planting, and now bouts of frost, and hot, windy weather have trimmed expected yields.  Dry conditions have also reduced estimated production in the state of Queensland.  Wheat harvest is about to commence in earnest.

Cooperative Bulk Handling Ltd., which procures much of the Western Australian grain crop, is expecting receivals (of winter-grown grain, oilseeds and pulses) in the state of more than 14 MMT, which would be a record quantity.  In the September 2003 Crop Report by the Australian Bureau of Agriculture and Resource Economics (ABARE), Western Australia's winter crop production was forecast at 13 MMT, marginally below the record 13.3 MMT produced in 1999/2000.

The higher wheat production forecast by Post is expected to permit additional quantities of wheat to be exported in marketing year 2003/04 (October-September).  Australia's 2003/04 wheat exports are forecast at 16.2 MMT, up 700,000 MT from the previous forecast and up sharply from the 9.0 MMT projected in 2002/03.

In October 2003, Australia and Thailand announced the completion of negotiations on a bilateral free trade agreement (FTA).  Reportedly, the FTA, which will be signed in the early part of 2004 and will go into effect in 2005, will provide Australia preferential access for wheat and wheat products in the Thai market.  As part of the agreement, Thailand will immediately eliminate the current 1 baht per kilogram tariff (ad valorem equivalent of 12-20 percent) on Australian wheat.  The Thai tariff on wheat gluten (31 percent) will also be eliminated immediately and the tariff on wheat flour (32.6 percent) will be reduced to zero by 2010.  Australia exported 283,302 MT of wheat in bulk to Thailand in 2002/03 (July-June).

Source: USDA