Production of wheat in Western Australia is expected to reach normal assuming average rains, while Victoria is still recovering from a series of dry, hot seasons. Similarly, barley production in 2016-17 is expected to be at 8.5 million tonnes, around the same level as in 2015-16, despite a slight fall in the harvested area. The outlook for winter crops is improved by Australia’s Bureau of Meteorology forecast of above average autumn rainfall over nearly all of Australia for the coming months.
The outlook for summer crops also depends crucially on average seasonal conditions. For 2016-17, the sorghum harvest is expected to reach 2.2 million tonnes due to more favorable seasonal conditions. Demand from China for barley and sorghum for feed grain is expected to contract while demand for feed grain in Australia is expanding.
Wheat is the major winter crop in Australia, with sowing starting between April and July. Harvesting starts in central Queensland during August and progresses down the east coast to Victoria, finishing during January. On the west coast, the wheat harvest starts during October and is completed during January.
The main producing states are Western Australia, NSW, South Australia, Victoria and Queensland. Major types of wheat include Prime Hard, Hard, Premium White, Standard, Soft and Durum, based on protein, grain size and moisture content and each grain has different end-uses. Australia accounts for around 3.5% of annual global production and Western Australia accounts for over 40% of exports, while a greater proportion of the eastern coast wheat crop goes to domestic consumption.
In 2016-17, wheat production is expected to be 24 million tonnes, the same as report’s estimate for 2015-16 which was slightly below the official forecast. The figure for 2015-16 has been revised because of an expansion in area harvested although yields are expected to be lower at around 1.7 tonne per hectare in both years. This forecast assumes average rainfall and is supported by Australia’s Bureau of Meteorology estimates of above median rainfall over 2016.
In 2015-16, national wheat production was adversely affected by limited summer rainfall in the Mallee and Wimmera areas of Victoria where substantial areas of crop were cut for hay. Very little of the Victorian wheat crop was classified as higher wheat grades, such as APH, H, APW or ASW. However in Western Australia, NSW and South Australia, the wheat harvest is expected to reach at least average levels, assuming favorable seasonal conditions.
Exports in 2016-17 are expected to reach 17.5 million tonnes over the marketing year. In 2015-16, wheat exports are forecast at 17 million tonnes, the same as the official estimate for that year. Australia faces greater competition in some of its traditional markets such as Indonesia, where Black sea exporters have doubled their share of the Indonesian import market, with a 16% share in 2015 compared to Australia’s 58% market share. However, regional market shares in Malaysia, Vietnam and other countries remains resilient although the Japanese market has become less important. Vietnam currently imports about three quarters of their requirements from Australia.
In 2015-16, Australia was the ninth largest wheat producer in the world and the fifth largest exporter. Around 80% of Australian wheat production is exported, with WA the leading state. Around half of wheat grown in eastern Australia is consumed locally, while 90% of grain produced in Western Australia and South Australia is exported. The major export markets are in the Asian and Middle East regions and include Indonesia, Japan, South Korea, Malaysia, Vietnam and Sudan.
An increase in export capacity has occurred in Australia, with multiple new port facilities and over the past five years, Australia has added 4 million tonnes of bulk export capacity. Most of Australian wheat is exported in bulk cargoes. The top 10 importing markets account for 80% of exports.