Wheat acreage in Australia, the sixth largest producer globally, is likely to shrink in the upcoming marketing year 2022-23 (October-September) due to rising input costs, analysts told S&P Global Commodity Insights. A likely drop in the wheat acreage may also lead to a decline in output and exports. A tight supply from Australia is significant .
China suspension of economic dialogue with Australia not seen hitting wheat trade: sources
China’s decision to suspend trade activities under a strategic economic dialogue with Australia is unlikely to affect Australian wheat exports in the 2020-21 marketing year, as most of the supplies expected during the season have been already booked or sailed, sources said.
China on May 6 said it was indefinitely suspending all activities under the China-Australia Strategic Economic Dialogue, countering a series of measures, which China said were taken to disrupt the normal exchanges and cooperation between the two countries.
The trade dispute between China and Australia has been brewing since 2020, with China imposing heavy trade curbs on commodities like barley and coal flowing from Australia.
Optimism from an anticipated record Australian wheat crop, estimated to be the country’s second-largest, is likely to outweigh trade concerns from troubled Australia-China relations in the first half of 2021.
Australia’s wheat market is set to welcome the new year with a positive outlook as cargoes are priced to attract ample export demand.
Despite price pressures from prospects of an improvement in wheat production, Australia has benefited from the recent rally in Russian wheat prices, which was driven by dry weather conditions and wheat export restrictions.
Nonetheless, Australia faces some risks in 2021, particularly logistical challenges from handling a huge 31.2 million mt wheat crop and the volatile Australian dollar.