Australia crop trade shifts focus after record December

Australia exported record-high supplies of all three of its major crops — wheat, canola and barley — in December following a bumper harvest, but early line-up data show that wheat and canola shipments could outpace barley in the coming months.

Wheat and canola exports made up 88pc of Australia’s 4mn t monthly agricultural export capacity in December, latest customs data show. Australia’s December wheat exports reached 2.7mn t, up by over a fifth on the year and a record for the month.

China drove demand for Australian wheat, with trade between the two countries in December up by 150,000t on the year. China accounted for 860,000t, or just under a third, of Australia’s December shipments. And demand could remain high as China looks for opportunities to rebuild its wheat reserves at advantageous market prices. The country’s own domestic crop is dwindling, with local Chinese wheat prices reaching the highest premium to corn for the past three years.

Australian exports to other key buyers also surged on the year. Indonesia took 380,000t in December, up by 65pc on the year, while shipments to South Korea and the Philippines more than tripled on the year, with each taking just short of 300,000t. In contrast, wheat shipments to buyers in Japan, Yemen and Malaysia fell.

Australian wheat exports usually peak in January-June, suggesting that a strong and early start to the season could allow the nation’s shipments of crop to rise above the current record of 2.71mn t from June 2022 in the coming months.

As for canola, Australia’s exports tripled on the year in December to 884,000t. Over three-quarters of the volume shipped to the EU, with Pakistan the next largest single buyer.

Combined shipments to Belgian, German, Dutch and French ports totalled 680,000t, up from 275,000t a year earlier.

Australian barley exports also hit a monthly high in December, but line-up data suggest that shipments may fail to maintain a record pace into the key January-August export season, as barley gives way to other crops.

Australia shipped 1.08mn t barley in December, up on the year by 80,000t, customs data show.

This represented a relatively modest year-on-year rise of 7.6pc, compared with wheat and canola.

Only around 450,000t of barley are currently confirmed for January shipment, representing under half of December’s figure, Argus line-up data show. Volumes lined up for February currently stand at around 650,000t.

Australian barley trade has suffered from China’s 80.5pc import duty on barley, cheap feed-grade wheat, and canola’s rise as a cash crop.

Barley exports have found a growing market in Saudi Arabia, which received more than half of Australia’s barley exports in December, up from the 350,000t it imported in December 2021. Japan, Iran, Qatar and the UAE barely increased their receipts on the year.

The US Department of Agriculture’s Foreign Agricultural Service revised up export estimates for Australia in late January, pegging wheat exports at 27.5mn t and barley at 8mn t.

Tags: Australia, China, export, barley, bumper harvest, canola, wheat, shipments