Drought in eastern Australia will cut official estimates of the new wheat crop next week and could limit national production to just 15-20 million tonnes, official forecasters and grains brokers said on Friday. There has been very little winter crop sowing in eastern Australia because of drought, leaving only four weeks until the planting window shuts completely, they said.
"(National) wheat production is going to fall to below 20 million tonnes if we don't get timely rain in the next week or 10 days," said Andrew Walker, a broker at Fox Commodities.
Western Australia is growing a big crop after good rains, but restricted production from the east and south could cut the national crop to as little as 15 million tonnes, Walker said. The Australian Bureau of Agricultural and Resource Economics (ABARE) will cut its forecasts for all main winter crops on Tuesday, an official at the government agency said.
In March, before the growing season got underway, ABARE forecast Australia would produce 22.6 million tonnes of wheat in the year to end-March 2006, up from 20.3 million tonnes last year. A field trip by Reuters this week to eastern heartland wheat growing areas around Coward, 250 km (155 miles) west of Sydney, showed no planting activity, with normally green fields now empty dustbowls.
"Everything's just sitting around waiting to go," Cowra farmer Chris Groves said. "We're just waiting on the rain. And anything further west than here is in dire straits." Unusual deep cracks in fields on Ian Donges' neighbouring farm indicate a total lack of planting moisture.
After abandoning his usual canola crop, Donges is also waiting for rain. "I'm still reasonably confident of getting a crop in," said Donges, a self-confessed optimist. But, like other farmers in this prime growing district, Donges has never seen it as dry at this time of year.
Some dry planting had taken place further north in New South Wales. "(But) to date we still haven't got the planting rain that we require in the eastern states," broker Walker said on Friday. Walker sees Western Australian production this season holding national wheat output up above the 10 million tonnes of the year to March 31 2003 Australia's worst drought year in a century.
Central Queensland would produce a modest crop this season, while northern New South Wales will produce a crop of "some description", he said. "I'd be surprised if we got below 15 million tonnes. If it rains we'd be back in the 20s," Walker said.
Meanwhile, domestic sales of wheat by monopoly exporter AWB Ltd have stabilised local prices at around A$215 ($162) a tonne for Australian Premium White grade after 20 percent gains in recent weeks as shortages loomed.
AWB's domestic sales in the past month have risen sharply to around 300,000 tonnes as the exporter took advantage of drought price premiums of A$35-A$40 a tonne over international prices. Some traders said AWB could sell as much as 3-4 million tonnes on the domestic market.
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