September 1, 2004

Australia May Be Affected By Increased Global Wheat Production

The global consumption of wheat is about 590 million tons, and the current world production forecast is set at 609 million tons, according to Jane Laird, a grain marketer with Australia's monopoly wheat exporter AWB Ltd.

For the first time in four years, the world supply of wheat is outstripping consumption.

Ms Laird says that could hurt returns to Australian growers.

"With the world producing levels of grain that we've got, there is no supply risk just at the moment. We haven't really seen any unusual demand cropping up for wheat anywhere in the world, so that's really putting pressure on the price at the moment. Unless something really unforeseen crops up we could see prices trading at these levels for the next couple of months."

The difference is almost 20 million tons, which is just under Australia's total wheat yield.

This is the world's second biggest crop ever.