May 2, 2007

Australia may benefit from global wheat shortfall

Shortage supply in worldwide wheat production may be a boon to Australia's wheat farmers after recent good rains have poured on the grain growing regions. 

Wheat crops in the United States, Europe and Black Sea have all been besieged by adverse weather conditions while lower plantings are foreseen in Argentina and Canada. 

The International Grains Council (IGC) also expects strong demand for wheat this year with supplies still tight.

For these reasons, grains analyst Lloyd George says Australia should all the more be encouraged to plant wheat as its demand would also counterbalance its value in the world market.

However, a shortage of new seed varieties this season is imminent as seed breeders take up to two years to build up significant stocks of improved varieties which will have its limited amount despite strong demand this year.

However, Australian Crop Forecasters spokesman Ron Storey says that should not affect overall plantings as between a combination of farmer-saved seed and availability of seeds from companies are already enough.

Storey said it is the later-release of new varieties, which the farmers prefer, has been the predicament but he assured that there will be enough seed to get a crop planted.

Meanwhile the amount of grain held in storage has plummeted to more than 10 percent in a month due to increased domestic demand.

Latest figures from the Australian Bureau of Statistics (ABS) show the biggest fall was in wheat stocks, down 1 million tonnes, while the summer harvest kept feed grain levels steady.

At the end of March there was a total of 13 million tonnes held in stock by bulk handling companies and traders around the country.