Dry conditions for up to six months in parts of Australia's east coast are set to curb wheat crop yields for a third straight year in the world's No.4 exporter of the grain, a private US-based weather forecaster said on Wednesday. Australia has been grappling with successive years of drought that have wilted crops and left some farmers struggling to stay in business.
Declines in Australian wheat production in the 2019/20 crop year could buoy global prices that on Wednesday struck their lowest in 10 months. "Over the next three to six months we expect drier-than-normal weather in parts of (the states of) Queensland and New South Wales," said Kyle Tapley, senior agricultural meteorologist at Radiant Solutions, formerly MDA Earthsat.
"This is an area of concern as it is already dry," Tapley told Reuters on the sidelines of a grains conference in Singapore. Australia's wheat production fell to an 11-year low during the 2018/19 season, according to the country's chief commodity forecaster.
Output totalled 17.3 million tonnes, down from 21.24 million tonnes a year earlier, the Australian Bureau of Agricultural and Resource Economics and Sciences said in its final tally for the crop. Australian farmers will begin sowing wheat for the 2019/20 season in April.
Top palm oil producers Indonesia and Malaysia are forecast to remain drier-than-normal over the next two to three months, said Tapley. "For Malaysia and northern parts of Indonesia, we expect drier weather which could impact palm oil output towards the later part of the year as there is a lag," he said.
India's June-September monsoon season is forecast to be normal this year, Tapley said. The four-month monsoon season delivers about 70 percent of India's annual rainfall and is key to the success of the farm sector in Asia's third-biggest economy. Meanwhile, Tapley expected weather across much of the northern hemisphere to be normal over the summer.
El Nino weather conditions associated with droughts and flooding have a 50-60 percent probability of developing by May this year, the UN World Meteorological Organization said on Tuesday, but any El Nino was not expected to be strong. The last El Nino, a warming of ocean surface temperatures in the eastern and central Pacific every few years, occurred from around 2015 to 2016.
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