Australian wheat exports crash

Australia's exports of wheat in 2007/08 are likely to be nearly halved as stocks run out after two successive years of drought. National exporter AWB Ltd on Friday agreed with a forecast big decrease in wheat exports by the government unit, the Australian Bureau of Agricultural and Resource Economics.
The bureau forecast this week that exports for the year to June 30, 2008 would fall by 37.9 percent to just 7.0 million tonnes, after a drawdown of 307,000 tonnes from stocks.
According to the bureau, 6.2 million tonnes was drawn from stocks last year to support exports of around 11 million tonnes, after drought slashed the 2006/07 wheat crop by over 60 percent to 9.8 million tonnes. This wiped out most of the country's wheat stocks, leaving just 1 million tonnes left at October 31, figures from the Australian Bureau of Statistics showed.
A further drawdown of 300,000 tonnes would leave storage bins almost empty. Even though the wheat crop now being harvested has risen to 12.7 million tonnes, less stocks were available to meet export demand, John Hogan, the bureau's manager, agricultural commodities, told Reuters. "We have got stocks at very low levels," he said.
WHEAT RATIONS: Hogan sees Australia having just enough wheat to meet domestic demand, forecast at 6.4 million tonnes in 2007/08, and to supply its major customers. AWB has an established policy of rationing its exports among its key customers, mostly in East Asia, when wheat is in short supply because of poor crops.
The bureau this week forecast that Australia's wheat exports would be worth A$2.3 billion in 2007/08, down only slightly on A$2.8 billion the year before, but well under the A$4 billion normally received in a good year.
Record high world wheat prices caused partly by Australia's small crop has helped boost forecast returns, with unit returns from exports in 2007/08 forecast at A$346 a tonne, up from A$267 last year. The bureau's first forecast for Australia's 2008/09-wheat crop will not be issued until March next year.
But like others in the industry, Hogan sees Australia going for another big wheat crop next year despite the crop failures of the past two years. Last week, private group Australian Crop Forecasters said it saw the prospect of a big 20-25 million tonne wheat crop in 2008/09, given reasonable weather.
Tom Keene, managing director of big grains group GrainCorp Ltd, also said he saw the prospect of "very large" wheat planting. The bureau's Hogan also sees the prospect of a 20-25 million tonne Australian wheat crop. He noted that seasonal conditions had improved and that the Australian Bureau of Meteorology was forecasting good growing conditions with the advent of a La Nina weather event.