Australian wheat crop may reach just 10 million tonnes Monday, October 9, 2006, 10:30 AM
by Peter Shinn
Dow Jones reports the Grains Council of Australia (GCA) believes Australian wheat production could total just 10 million metric tons this year, less than half of normal, due to drought and late-season freezes. A GCA press release said the organization currently believes total Australian cereals production will be no more than 13 million metric tons, 2.5 million of is barley.
In fact, GCA Chairman Murray Jones said in the press release he's concerned Australia may have to import wheat this year, a situation he said could be avoided if the Australian government had a better handle on the nation's domestic stocks. Jones is calling on the Australian government and Australia's wheat industry to fund research on just how much wheat is on-hand in Australia.
"This year's harvest may be as bad as 2002/03, but we don’t know because there is a big gap in our data," Jones said. "We just don’t know how much of our largest grain crop, wheat, is in the storage system or where the stocks are. If we’re looking at a cereal crop of around 13 million tonnes (wheat and barley) it's going to be a very tight year for grain supplies. Greater transparency of stocks would help to dampen market speculation," he added.
Jones said that lack of data is causing a sharp speculative rise in domestic wheat prices, but he disputed that wheat imports into Australia are needed as yet. "Domestic prices have to firm another $30 to $40 before we reach real import parity," he said.
And according to Jones, importing wheat is bad news for Australia, and not just economically. "We would not like to see the need to import grain, mainly due to the quarantine risks," he said. "New pests and diseases would be bad news for grain and livestock producers."
Jones said Australian wheat destined for the export market should be diverted to domestic uses. But according to Dow Jones, the Australian Quarantine & Inspection Service (AQIS) has already received a number of applications to import wheat and other grains. AQIS has reportedly sent the applications to Biosecurity Australia for risk assessments, and no import permits have been issued yet.
