October 5, 2013
Australian wheat production will jump by 13 per cent to 25 million tonnes next harvest on the back of a slightly bigger planting and better yields. Forecasts released by the national commodity forecaster, ABARES, at this week’s Outlook Conference in Canberra indicate Australia will be selling the bigger crop into a softening export market due to rising world stocks. As a result, ABARES predicted Australia’s wheat exports would drop by five per cent to 21 million tonnes in 2013-14 and returns would decline by eight per cent to $6.6 billion. The world wheat indicator price (US hard red winter, fob Gulf) was projected to ease during the next five years, declining in real terms from $US362 a tonne in 2012–13 to $US260 in 2017–18 (in 2012–13 dollars). World wheat closing stocks were forecast to increase by one per cent in 2013–14 to 176 million tonnes. Stocks held by most major producers were tipped to remain largely unchanged with the exception of Russia where they were forecast to rise by 30 per cent from a low base. Global wheat consumption was projected to rise by an average of one per cent a year to 726 million tonnes in 2017–18. Consumption of wheat as food, which accounted for about 70 per cent of total consumption, was expected to increase in line with population growth over the projection period, reaching 492 million tonnes in 2017–18. Back home, ABARES tipped a four per cent lift in Australia’s wheat plantings next season to 13.8 million hectares due to recent higher prices. Australian wheat output was forecast to rise by one per cent a year between 2013-14 to 2017-18 to almost 26 million tonnes, largely because of extra yield. But exports weren’t predicted to keep pace with the bigger harvests, sitting at around 19 million tonnes by the end of the forecast period. The APW 10 net pool return would sit at an estimated $243 a tonne (in real terms) in 2017-18 compared with an estimated $288 for next season. World wheat output was forecast to increase by five per cent in 2013–14 to almost 690 million tonnes, largely driven by forecast higher yields in the Black Sea region and the European Union. Production in the Black Sea region, particularly Russia and the Ukraine, was forecast to rebound strongly in 2013–14 following lower yields in the previous season because of persistent hot and dry conditions. The Russian harvest was predicted to jump by 41pc to around 55 million tonnes. Similarly, production in the Ukraine was forecast to rise by 27pc to around 20 million tonnes while in Kazakhstan wheat production was tipped to rise by 64pc to about 16 million tonnes. In the European Union, the world’s largest wheat producer, the harvest was predicted to rise by five per cent in 2013–14 to around 138 million tonnes. China’s output was projected stay largely unchanged from the previous season at 121 million tonnes while India’s output was forecast at 90 million tonnes. Production in the drought-hit US was tipped to drop by 7 per cent next season to 57 million tonnes.