Drought behind 70% grain price rise
GRAIN prices are up to 70% higher compared with the same time last year.
Despite dropping slightly on pre-Christmas rates, Australian domestic wheat, barley and oat prices have been driven up by the significant drop in production due to drought.
Rabobank senior grains and oilseeds analyst Cheryl Kalisch Gordon said globally wheat prices were up about
20% year-on-year and 70% domestically, while world barley prices were up 25% and
“They are staggering increases and it shows the drought deficit. If you look at wheat year-on-two-years prices are up 100 per cent,” Dr Kalisch Gordon said.
She said globally there had been a tightening of supply, which was keeping prices high.
“We think in the second half of this year when more northern hemisphere wheat comes on to the market, prices will drop back,” she said.
Domestically, Dr Kalisch Gordon said it would depend on what happened with the season in March–April.
“Prices will probably stay positive until harvest 2019 because stocks are so low,” she said.
On Monday Australian Premium White wheat was sitting at $442/tonne, delivered Melbourne, compared to $265/tonne last year – an increase of 67%.
Malt 1 barley was making
$385/tonne, delivered Melbourne, up 45% on the
$264/tonne last year, while feed 1 barley was at
$390/tonne, up from
$248/tonne last year, or 57%. Milling oats was sitting at
$502/tonne, compared to
$205/tonne at the same time last year — an increase of
Canola prices were also higher year-on-year domestically, despite being flat globally, sitting at