Singapore, June 2 (BNA): Australia is preparing for a third year of near-record wheat production in 2022 as good weather boosts farming across the grain belt, easing concerns about tight global stocks.
Global wheat supplies have been squeezed by cutting off shipments from one of the world’s largest export regions, sending grain prices soaring and raising fears of a global food crisis.
India’s recent move to ban exports and bad weather in the US have heightened concerns about the availability of food grains.
Chicago Board of Trade wheat futures prices jumped to an all-time high of $13.64 a bushel in March. The market was trading 0.4% higher at $10.45-1/4 a bushel, as of 03:07 GMT Thursday.
Farmers in Australia, which emerged as the world’s second largest wheat exporter in 2021/202, have almost finished planting this year’s wheat on about 14.45 million hectares (35.7 million acres), an all-time high, encouraged by rising prices and optimism. Growing conditions, as estimated by IKON Commodities brokerage.
She added that wheat production last year amounted to about 14 million hectares.
Although it is still too early to estimate the full size of the 2022-23 crop, which will be harvested at the end of the year, analysts and traders are beginning to forecast total production at around 30-35 million tons, not far from the record 2021-22 harvest of more than 36. million tons, according to Reuters.
“Are we looking at a crop of over 30 million tonnes for the third year in a row? I think we have a good chance of that,” said Finn Ziebel, agribusiness economist at National Australia Bank in Melbourne.
“Farmers have good cash positions and the weather is really working in their favour.”
In the past 10 years, the country’s wheat production has averaged 24.8 million tons annually, according to data from the Australian Bureau of Economics, Agricultural Sciences and Resources (ABARES).
While wet conditions aided cultivation on the country’s east coast, known for its high-protein durum wheat, timely rainfall in Western Australia also lifted sowing.
However, global wheat production is expected to decline to 774.83 million tons in 2022-23, from 779.29 million tons a year earlier, according to USDA data.
Traders said Asian buyers rely heavily on Australian wheat, with China emerging as the biggest buyer this year. Indonesia, the world’s second largest buyer of wheat, and Japan and South Korea are other major importers of the region.
Australian farmers have enjoyed an all-time high in wheat prices this year with record production giving an added advantage.
Australian Premium White (APW) is priced at $440 a ton, free on board, Western Australia, this week, just below the record $460 a tonne a few weeks ago.
Traders said importers are looking to close deals earlier than usual for the crop that will be ready for harvest in November.
“We expect business to start earlier than usual in the August-September period,” said a Singapore-based trader.