December 16, 2022

USDA says Australian wheat output on track for new harvest record

Despite November floods in Australia, the United States Department of Agriculture (USDA) has raised the Australian wheat production forecast for the 2022/23 marketing year (July 2022 to June 2023), with wheat exports expected to jump 9.8% this marketing year thanks to strong harvests and limited global supply, Hellenic Shipping News reported.

For the third year in a row, Australia has been hit by the La Nia weather phenomena, which has resulted in increased rainfall. While floods caused some areas to lose wheat quality, more rains helped yields across the country. Australia is now expected to harvest 36.6 million tonnes of wheat, 0.7% more than previous year.

With two consecutive bumper wheat harvests, Australia's wheat exports might account for 13.7% of worldwide wheat exports this marketing year. Wheat exports from the previous year's crop were robust in the second half of 2022, when quantities generally tend to drop.

During the first half of 2022, when export ports were operating at maximum capacity, Australia's infrastructure was put under considerable strain. Some difficulties were observed in transporting wheat to port facilities, but no major disruptions occurred. Although investments have been made to increase capacity, operational issues may still arise in the coming months.

Due to a poor crop in Argentina, the only other major southern hemisphere wheat exporter, Australian wheat is expected to be in high demand this season. Argentina is now expected to export 7.5 million tonnes of wheat in the current marketing year, down 57.5% year-on-year and well below the 10 million tonnes export quota established in March.

According to the USDA, worldwide wheat exports will increase by 3.6 million tonnes, or 1.8% year on year, in the marketing year 2022/23. This rise, however, will come at the expense of exporting nations' stockpiles, since harvests are forecast to be lower than global consumption. Global wheat stocks are expected to fall by 8.9 million tonnes. A resolution to the Ukraine conflict is still required to increase global wheat supply and reduce demand destruction in low-income nations.

-         Hellenic Shipping News