February 28, 2006

Australia lowers 2006/07 wheat crop forecast by two percent

Production from the next Australian wheat crop will fall 2.0 percent to 24.6 million tonnes from an actual 25.1 million tonnes this crop year ending March 31, according to an official forecast issued Tuesday Feb 28.

The modest reduction next crop year reflects the impact of a slight increase in the area planted to 12.81 million hectares and a slight reduction in yield to 1.92 tonnes a hectare, the Australian Bureau of Agricultural and Resource Economics (Abare), the government's chief commodities forecaster, reported in its quarterly outlook publication.

Abare expects wheat production will rise steadily in the following years to reach 27.7 million tonnes in the 2010/11 crop year, it said.

Abare also forecast wheat exports next crop year at 17.86 million tonnes valued at A$4.08 billion, compared with an estimated 15.76 million tonnes valued at A$3.48 billion this crop year.

Indonesia is Australia's largest market for export wheat, with demand expected to grow steadily in coming years, Abare said.

A reduction in world supplies of grains and oilseeds along with growing demand is forecast to result in an increase in prices in 2006/07, it said.

Increased demand for feed grains from intensive livestock industries will underpin growth in coarse grains consumption in 2006/07, it said.