Fears for global wheat markets as rain hits Australian harvest

Heavy rain in the east of Australia is threatening to downgrade the wheat crop and could have severe knock-on effects on a world grain market which was counting on a bumper harvest.

Analysts believe that up to a million tonnes of wheat may have been lost due to rain and floods in New South Wales and Queensland.

Australia is the world’s number two producer of wheat and before last month’s floods, global food markets had been hopeful that a record crop could ease tight inventories.

This would have brought relief to global markets suffering from the Ukraine war and summer droughts in North America.

Flooding started to spread across the two states and parts of Victoria just as Australia was preparing for its early November harvest.

Rainfall in wheat-growing states has been at its highest level in 20 years.

Although the harvest is still likely to be a large one, waterlogged wheat fields mean that up to half of eastern Australia’s crop is likely to be downgraded in quality to animal feed.

However agricultural experts say it will be impossible to quantify the damage to the crop until waters have receded.

“There have been some growers who have had total loss… it’s still pretty raw for many people,” Brett Hosking, chair of the farmer organisation GrainGrowers.

“In the next fortnight or so we will have a very clear picture.”

Leading Australian supermarket chain Woolworths has predicted that heavy rains could keep squeezing prices of goods such as potatoes.

Rains have caused widespread damage to other crops, including barley and canola, and have raised the prospect of farmers defaulting on loans.

Argentina, the second-largest southern hemisphere wheat producer, is also seeing its wheat crop affected by the La Niña weather phenomenon – the third in successive years.

Years when La Niña weather patterns occur typically see increased rainfall in Australia and drier conditions in parts of North and South America.

Tags: Australia, Ukraine, bumper harvest, rain, grain market, wheat crop, floods