December 15, 2003
Australia 2003-04 Wheat Output Up; Price To Slip
Australia's wheat production this crop year ending March 31, 2004, will more than double to 23.91 million metric tons, and could have been even higher but for some poor weather, government forecasting and analytical agency, the Australian Bureau of Agricultural and Resource Economics, reiterated Monday.
Actual output last crop year was a drought-depleted 10.06 million tons.
Abare, in its quarterly Australian Commodities outlook publication, attributed the increase in new crop production to above-average conditions in Western Australia, where record output is expected, South Australia and Victoria states.
But crop prospects were reduced by below-average rains in the growing season in northern areas of New South Wales and Queensland, where yields were below average for the fourth consecutive season, it said.
Hot weather, rust and frost undermined crops prospects in central and southern New South Wales, it said.
Rain and hail during the harvest in November and December adversely affected yields and grain quality in some parts of southern Australia, it said.
The harvest will finish in growing areas near the south coast around the end of January.
Australia is a major global exporter of wheat.
Abare estimated wheat exports this fiscal year ending June 30, 2004, at 13.99 million tons valued at A$3.35 billion, compared with 10.81 million tons valued at A$3.11 billion last fiscal year.
Gross returns to Australian farmers this fiscal year, based on AWB Ltd.'s benchmark export pool price for its collective sales, are projected to fall to A$224 a metric ton from A$251/ton last fiscal year, in part reflecting the impact of a stronger Australian dollar, it said.
Abare forecast the price of the indicator U.S. hard red winter wheat, free on board, Gulf of Mexico, to average US$151/ton this fiscal year, down 5.6% from an actual US$160/ton last fiscal year.
World wheat prices are expected to remain relatively firm until the second quarter of 2004 when harvest outcomes for major northern hemisphere crops become clearer, it said.
Before then, any reports of wide-scale damage to winter wheat crops as they come out of winter dormancy "could prompt significant price increases," it said.
For this fiscal year, Abare projects world production at 552 million tons, consumption at 586 million tons, closing inventories at 129 million tons and global trade at 96 million tons.
For last fiscal year, it estimated production at 567 million tons, consumption at 601 million tons, inventories at 163 million tons and trade at 104 million tons.