Lower expected protein in a large Australian wheat crop will encourage a shift in the country's exports back towards nearby Asian buyers after unusually high sales to the Middle East last season, grain handler CBH Group said. CBH nudged up its estimate of the country's 2013/14 wheat harvest to 26 million tonnes, from 25.9 million two weeks ago, and sees potential for more upward revisions, Sean Cowman, the group's marketing manager for the Middle East and Africa, said.
Like others in the market, co-operative CBH increased its outlook for the ongoing Australian wheat harvest due to favourable conditions in western and southern belts that have offset frost and drought damage in the east. Last season, the Australian crop was 22.1 million tonnes. High protein levels at a time of short supply from Black Sea exporters such as Russia fuelled Australian sales to the Middle East in 2012/13, but the new marketing campaign should see Asian destinations come back to the fore, Cowman said.
"It will be a more traditional year with Asia," he told Reuters ahead of a presentation on Wednesday at the Global Grain conference in Geneva. "The thing the Australian farmer will be looking at, apart from the weather, will be Chinese demand." A burst of buying by China in 2013, after weather damage to its own wheat crop, has already brought large sales for Australia, but Cowman said Australian exporters would be watching for competition from India after the authorities there moved to cut the floor price for selling state reserves. The Middle East and Africa claimed 43 percent of Australian wheat exports in 2012/13, against 20-30 percent in previous years, led by strong sales to Iraq, a major buyer of high-protein wheat, he said.
"Indications are that the (new) Australian crop will be a mid-to-low-protein crop," he said, estimating that two-thirds of the harvest would show 11.5 percent protein or lower, assuming 11 percent moisture. Another feature of the 2013/14 marketing campaign would be a tailing off in exports from eastern Australia, as the drought-hit harvest would be absorbed more by domestic needs, he said. This could lead to lower volumes of wheat exported in containers, a shipping method that has grown rapidly in eastern Australia in recent years, he added.
CBH expects bulk exports of Australian wheat, which are centred in CBH's heartland of Western Australia, to be stable this season at around 17 million tonnes, with container volumes possibly falling back from some 2 million tonnes last season. CBH raised its crop outlook for Western Australia to 9.2 million tonnes from 8.7 million, offsetting in its national forecast the weather-affected prospects in the east.
Comments
Comments are closed.