September 9, 2011

 

Australian wheat exports slow down

 

 

Although Australian southern hemisphere continued its momentum of rising grain exports in July, shipments at 1.7 million tonnes were only 5% more than last year, a considerable slowdown from increases averaging higher than 30% in the 2010-11 season.

 

"The growth rate in Australian wheat exports slowed considerably in July," an analyst said.

 

The slowdown coincided with the return of Russia, renowned for its competitive prices, to wheat exports, after an 11-month ban imposed to save supplies hit by the country's worst drought on record.

 

Russia's grain exports, mainly wheat, have been pegged by analysis group SovEcon at 2.6 million tonnes in July and 2.9 million tonnes last month.

 

"That has affected everybody, not just Europe and its trade with the Middle East," a UK grain trader said.

 

"For Australia too, they have had to realign their price expectations."

 

However, Cargill-owned AWB, the Australian grain handler, said that recent rises Black Sea prices had lifted pressure on export values.

 

"Over recent weeks, Eastern European wheat prices considered to be the cheapest global wheat, have risen substantially in line with strong demand," AWB spokesman Jon White said.

 

"When combined with a predicted smaller corn supply out of the US, this translates to higher expected prices for Australian wheat."

 

Signally, Australian wheat was offered at an Egyptian grain tender two weeks ago at US$303 a tonne cheaper than French and US grain, excluding shipping, and only some US$8 a tonne above winning Russian offers.

 

AWB on Monday (Sep 5) increased by AUD10 (US$10.62) a tonne, to AUD300 (US$318) a tonne, its forecast for returns to farmers selling benchmark Australian prime wheat through its pools.

 

The official export report also showed Australia's canola shipments slowing last month, to 600 tonnes. However, rapid trade earlier in the season has caused exports to hit 1.38 million tonnes, the best October-to-July performance for a decade.

 

"The Australian canola export programme has essentially finished for the marketing year," ANZ's Paul Deane said.

 

"Exports are likely to remain marginal until new crop supplies become available."