Australia to boost planting of wheat and barley
Australian farmers are likely to plant more wheat and barley this year, thanks to Chinese demand and wet weather on the country’s east coast, while canola sowing should fall amid lower profit margins and dry conditions in the west, analysts have said.
Australia is the world’s second-largest wheat exporter and a key supplier of barley and canola.
Wheat and barley production was likely to increase by several million tonnes in the 2024-25 season ending in June next year, while canola output could decline by a million tonnes, analysts said.
“The east coast is looking really good, with lots of rain,” said Ole Houe, director of advisory services at IKON Commodities in Sydney.
With sowing just getting under way, additional planting in eastern Australia should boost wheat area by 1 to 3 per cent and barley area by 3 to 15 per cent, while canola area could shrink by 4 to 20 per cent from 2023-24, analysts estimated.
Dryness in Western Australia is likely to hit canola the hardest because it is planted earlier and offers a smaller profit margin than wheat or barley.
“Canola area will be the first to get cut … If dry conditions [in Western Australia] push into May, we will start to see wheat and barley area pared back, too,” Rod Baker at Australian Crop Forecasters in Perth said.
Western Australia produced around one-third of the 26 million tonnes of wheat and 10.8 million tonnes of barley harvested nationwide in the 2023-24 season and nearly half the 5.7 million tonnes of canola, government data showed.
Farmers wanted to plant more barley after China lifted punitive tariffs on Australian barley last year, adding to demand, Commonwealth Bank analyst Dennis Voznesenski said.
Australia’s barley exports rose to a record monthly high of 1.3 million tonnes in December, of which 90 per cent went to China.
China has also boosted purchases of Australian wheat in recent years, though some cargoes have been cancelled in the past few months because of a drop in global prices.
IKON Commodities, Commonwealth Bank and Australian Crop Forecasters predicted wheat production of 29.5 million to 29.9 million tonnes in 2024-25, with brokers StoneX expecting around 26 million tonnes and consultants Episode 3 around 27 million to 27.5 million tonnes.
For barley, Commonwealth Bank raised its forecast by around 100,000 tonnes to 12.8 million tonnes and Episode 3 predicted a harvest of 11.5 million to 12 million tonnes.
For canola, Commonwealth Bank cut its forecast by around 750,000 tonnes to 5 million tonnes and IKON said the harvest could be as low as 4.6 million tonnes.
Most Australian canola is shipped to Europe to be made into biofuel.