Australia’s January crop exports confirm shift to wheat

Source:  Argus Media

Australian crop exports in January confirm that wheat cargoes are increasingly dominating vessel line-ups after exports of all three main crops — wheat, barley and canola — hit record highs in December.

Australia shipped a record 3.34mn t of wheat in January, latest data from the country’s statistics office ABS show, representing a 26pc increase on the year and well above previous monthly records for wheat of around 2.6mn-2.8mn t/month.

Demand from China drove the surge in wheat exports. Chinese buyers took 945,000t, or 28pc of the total. China is understood to have low wheat stocks at present and importers have taken advantage of a dip in global prices heading into the second half of the northern hemisphere’s marketing year to build stocks. Domestic availability fell in January-February — local Chinese wheat prices reached the highest premium to corn for the past three years — and after a gradual slide in prices since then, the country’s wheat consumption has started to recover, with rising demand from millers as Covid restrictions relax and the country’s schools reopen.

Markets across southeast Asia were also key outlets for Australian wheat in January, with Indonesia taking 16pc of exports that month, and South Korea and the Philippines each taking around a tenth of the total.

Australia also shipped 35,000t of wheat to India in January, shown in [Argus‘ vessel line-up]( as two separate cargoes heading from ports in South Australia. Line-up data show a further 44,000t scheduled to leave from ports in South Australia and New South Wales in February.

And latest line-ups show Australia is set for another record month for wheat exports in February, with around 3.1mn t of cargoes confirmed, including 510,000t bound for China. Around 1.3mn t of wheat are currently scheduled for March.

A surge in wheat left little room for barley and canola shipments to maintain December’s record monthly pace, with the total volume exported across Australia’s three main crops unchanged on the month at 4.5mn t in January. But barley shipments could rebound in February-March, thanks to uncompetitive global corn prices.

Australia exported 470,000t of barley in January, down by almost a quarter on the year and noticeably below the 1.08mn t exported in December. Saudi Arabia remained a key buyer, taking just under a quarter of the January total. But a resurgence in deliveries to Jordan and southeast Asian buyers Philippines and Thailand were unable to offset declining demand from Japan, Iran, Qatar and the UAE.

Line-up data currently shows a rebound in Australia’s barley exports in February, with a return of Japanese buyers and ever-present Saudi Arabian demand set to take that month’s volume to just short of 1mn t. Over 600,000t of barley are currently scheduled for March.

Two cargoes of sorghum were also confirmed for Asian destinations — the crop would typically compete with barley but has climbed to the highest fob price in three years in recent weeks as dry weather is forecast for the main producing regions, rendering Australian sorghum far less competitive compared with French barley for Chinese importers.

Meanwhile, Australia shipped 720,000t of canola in January, down slightly on the month but in line both with exports a year ago and volumes lined up for February shipment. EU countries remained key buyers, taking over half of Australia’s canola shipments in January.

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