An export boost for Australian grain growers could be one coronavirus bright spot

The effects of the coronavirus could boost exports for Australian grain growers.

TRAVEL Grain Wheat Great Southern Western Australia Generic Tourism Story Allen Newton Picture: STEWART ALLEN

AUSTRALIAN wheat growers could benefit from a further depreciated Australian dollar as the global impacts of the coronavirus outbreak take hold.

The effects of the coronavirus on the grain industry have been detailed in a report from the Australian Export Grains Innovation Centre, which found the predicted slowdown in global economic growth, coupled with the slowing of economic growth in China, will lower the dollar.

“This will work to the advantage of Australia’s agriculture export industries by making Australian products more price competitive in international markets,” the centre’s chief economist, professor Ross Kingwell, said.

The report indicated in late December last year, pre-coronavirus, the Australian dollar was at US69c.

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Since then it has dropped below US67c and could devalue further to about US65c, Mr Kingwell said.

At US65c, the price of Australian wheat would shift from $333 to $351 a tonne free on board.

In terms of barley, the report showed China’s African Swine Fever outbreak was of much greater concern to Australia.

“Subdued Chinese New Year celebrations lessened beer consumption and will cause a negative flow-on ­effect for subsequent importation of malt and malt barley used in beer production,” Mr Kingwell said.

“The far more serious issue limiting Australian barley exports to China is the aftermath and ongoing management of the incidence of African Swine Fever.”

The physical delivery of grains to China is also expected to slow, “triggering” lower international prices.

The Baltic Index is nearing 10-year lows, on concerns about trade volumes and flows,” Mr Kingwell said.

And factory closures and quarantining of some workers in China will likely “disrupt the supply” of some inputs for Australian crops, which could make them more expensive.