August 23, 2011
Australian 2010/11 wheat exports may surge 28%
The marketing year may see Australia's wheat exports jumping by 28% to reach 19 million tonnes, shipments could also hit record levels, according to analysts on Monday (Aug 22).
According to Reuters, an agricultural commodities strategist at Commonwealth Bank of Australia said that they expect exports of about 19 million tonnes because of demand for feed wheat in Southeast Asia.
Wheat exports in 2009/10 were 14.79 million tonnes.
Shipments could come close to a record 19.2 million tonnes exported in 1996/97, although there is a looming threat of cheap Russian wheat swamping global markets.
Millions of tonnes of low-priced Russian wheat have entered global markets since Russia ended its grain export ban in July, sweeping aside competitors from Europe and the US.
The ban was imposed last year when a severe drought curbed production in the world's third-largest wheat exporter.
Australia produced a record 26.3 million tonnes crop in 2010/11 but much of the crop was reduced to feed quality wheat because of a wet harvest.
Australian grain marketer Emerald Group expects exports to reach 18.6 million tonnes this year as countries such as Indonesia, Vietnam and China snap up Australia's abundant supplies of lower quality wheat.
There was a lot of feed wheat going out, said an Emerald senior trader.
"Prices are not fantastic but they are not that bad as there are a lot of countries that do not mind lower quality feed," he said.
"In fact, Australian feed wheat into Southeast Asia is the cheapest in the world," said the trader, adding that supplies from recently re-opened Black Sea origins have yet to hit Southeast Asia.
Australian feed wheat headed for Southeast Asian markets is currently selling for AUD260-270 (US$270-281) per tonne, free-on-board (FOB).
The trader also said sales into the Middle East had been weak because the quality of the last harvest was not up to standard.
"That is disappointing as prices for milling wheat are substantially higher than feed wheat," the trader added.
He said the major challenge for Australian wheat exports was a strong local currency which remains above the greenback at around US$1.04.
"Exports look likely slowing up a little bit in the final months of 2010/11 but having said that, there is still a lot of wheat flowing out," said an analyst at Australian Crop Forecasters.
He said bookings were strong but whether shipments were executed remained to be seen.