CANBERRA, AUSTRALIA — While Australia is anticipating a third straight bumper wheat crop that could help ease global food shortage fears, incessant rains in eastern Australia may hurt overall quality, raise prices and worsen a shortage of the high-grade variety used to mill flour for bread and noodles, Bloomberg reported.
Downpours and floods could turn a large portion of harvest into grain fit only for animal feed and reduce the quantity that’s suitable for milling into flour. In total, Australia is projected to produce 34 million tonnes of wheat and export 27 million tonnes, according to the US Department of Agriculture (USDA).
The quality worries are showing in the widening premium for eastern milling wheat over the feed variety. The lack of milling-quality grain across the East Coast this year means that demand for more general-purpose wheats with lower-protein content is gaining traction, James Maxwell, senior manager at Australian Crop Forecasters, told Bloomberg.While Indonesiaand the Philippines do buy general-purpose wheats such as Australian Standard White (ASW), where it qualifies as a milling grade, it’s not a classification that typically holds a significant premium, Maxwell said. While it’s unsurprising to see higher protein wheat prices go up, he said the elevated price for ASW could indicate the market is expecting a “massive downgrade” of the crop into animal feed.