Australia’s crop production to offset poor EU harvest

As Europe’s grain production volumes suffer from dry conditions, Australia could step in to make up the global export shortfall.

Outlook bright: Australian wheat and canola could make up the shortfall caused by the poor season in Europe, says Rabobank.

AUSTRALIA’S  bumper  winter crop production is expected to make up the shortfall in the global market caused by Europe’s drought affected season.

This month’s United States Department of Agriculture’s World Agricultural Supply and Demand Estimates report made no changes to Australia’s 2020-21 production outlook compared to last month — despite dry conditions over the past few months — with forecasts remaining at 26 million tonnes.

This is compared to 15.2 million tonnes last season.

And widespread rain earlier in the month has also boosted production for Western Australia — which produces about 50 per cent of Australia’s wheat — to about 15 million tonnes, a lift on June estimates of about 8.45 million tonnes, the recent Grains Industry of Western Australia crop report showed.

Findings indicated growers planted a record area of crop of close to 8.5 million hectares this season.

Rabobank London-based global grains and oilseeds strategist Stefan Vogel told growers at the bank’s Australian Grain Mid-season webinar that the production boost for Australian wheat and canola could make up the shortfall caused by the poor season in Europe.

Mr Vogel said after an excellent 2019-20 European harvest, where the European Union exported 38 million of wheat, this year’s EU export volumes are expected to fall at least 10 million tonnes.

While Ukraine is expecting an almost 10 per cent smaller crop than last year, Mr Vogel said.

And this shortfall would remain, he said, even with Russia still expected to produce a bigger wheat crop than last year.

“So if we want to keep stable or even growing global export volumes, Australia is actually required to give us a decent amount of wheat on to the world export market,” he said.

For canola, Mr Vogel said a poor harvest in Europe would cause the EU to produce its lowest crop since 2006 in the 2020- 21 season.

Rabobank Australian senior grains and oilseeds analyst Cheryl Kalisch Gordon told the webinar the bank maintained a positive outlook.

While it had slightly revised down its forecast 2020-21 wheat production to 25 million tonnes, Dr Kalisch Gordon said Australia would be “back as a significant player on the global grain export markets this year”.

“With production prospects higher for grain growers in most areas, it will be a year that will start to make up for the troubling years we’ve had recently,” she said.

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