As harvesting gets under way in Australia, the country is expecting to have its biggest wheat crop in four years after ample rains on the east coast earlier in the season boosted yields. Exports are poised to surge.
Farmers in the states of New South Wales and Victoria are particularly well placed for bumper crops thanks to drought-breaking conditions.
New South Wales is now set for a record season, according to IKON Commodities, which recently lifted its national forecast to more than 27.2 million tonnes, more than double last year’s figure.
“It’s looking really exciting at the moment on the east coast of Australia,” said Brett Hosking, a grains farmer in Victoria state and chairman of industry group GrainGrowers. “Even if they weren’t coming off a drought, they’d be looking at a really good harvest.”
The Australian Bureau of Agricultural and Resource Economics and Sciences forecasts 26.2 million tonnes of wheat output this season, while Rabobank expects 26.1 million tonnes.
Barley crops are also set to benefit from the rains, with output poised to rise more than 25 percent from last year, IKON said.
Hosking said that he is confident the bushels of Australian wheat would find a home in Asian markets, especially as a recent free-trade deal with Indonesia is paving the way for increased sales to a country that is already one of Australia’s biggest wheat export destinations.
Meanwhile, other major global importers are stockpiling the grain to shore up their supplies.
The blockbuster season is further bolstered as doubts remain over yields in other key wheat growing areas of the US and the Black Sea region, following dry weather and hurricane activity.
Futures in Chicago have surged more than 17 percent since the start of August, amid concerns about yields in those areas.
“Because the EU has a smaller crop, a lot of the Russian crop is running into North Africa and the typical EU destinations,” IKON chief executive officer Ole Houe said. “So we don’t have a lot of big competition into Asia this year.”
That is setting Australia up for a “major return to the global grains market,” a Rabobank report released on Thursday said.
The bank forecast that total grain exports would increase by 93 percent year-on-year, with support from a relatively low Australian dollar.
“The last time Australia had export volumes in these ranges, the Australian dollar was 10 US cents higher and global grain prices were around 35 percent lower than our current forecasts for the year ahead,” Rabobank senior grains analyst Cheryl Kalisch Gordon said.
Still, risks remain. La Nina is set to bring more summer rain to the southern hemisphere — rains that, if too heavy, could end up causing crop damage.
Some panicked farmers are already working long hours harvesting this week in case forecast rains in the coming days reduce yields.
Simmering tensions between Beijing and Canberra that have seen barley exports hit with bans also add a layer of complexity for markets and could see growers shift from planting barley to wheat next year, Hosking said.
“This is the first harvest that Australian growers will face without China, and coupled with that, it will be quite a big harvest,” he said, referring to barley. If that creates a barley glut, it might flow into wheat and sorghum, he added.
‧ Gold for December delivery rose US$0.60 to US$1,905.20 an ounce, while silver for December delivery fell US$0.03 to US$24.68 an ounce and December copper fell US$0.02 to US$3.13 a pound.
Additional reporting by AP
SETTING AN EXAMPLE: The commission suspended the bank’s two top executives as ‘a warning to all banks,’ while the fine is the biggest to be given to a bank in a single case The Financial Supervisory Commission (FSC) yesterday fined E.Sun Commercial Bank (玉山銀行) NT$20 million (US$693,698) over a theft scandal and punished the bank’s two top executives. A customer relationship manager surnamed Pan (潘) at the bank’s branch in Kaohsiung’s Fengshan District (鳳山) stole NT$140 million from 41 clients over the past seven years, the commission said. Pan secretly transferred the stolen money to accounts belonging to her and her family members by using clients’ debit cards, passwords or documents that were stamped using the clients’ personal stamps between July 2013 and June this year, the commission said. The commission suspended Ben Chen (陳炳良), the
Contract chipmaker Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) is expected to remain the third-largest IC supplier this year, unchanged from last year, IC Insights said yesterday. IC designer MediaTek Inc (聯發科) is expected to become the 11th-largest, up from 16th last year, the semiconductor market research firm said. TSMC is expected to post US$45.42 billion in sales, up 31 percent from last year, IC Insights said in a report released on its Web site. TSMC’s sales growth is largely due to a surge in orders from Apple Inc and HiSilicon Technologies Co (海思半導體) — two of its major clients — which
HARD ASK: At a meeting held by the MOEA to talk about the RCEP trade deal, trade associations said that they expect the government to push for more free-trade deals Business representatives yesterday urged the government to slow the appreciation of the New Taiwan dollar, saying that some Taiwanese industries have been undercut by rivals due to unfavorable foreign exchange rates. The government should also assist local industries to expand their domestic market, and push for more bilateral trade deals so that Taiwanese companies can enjoy zero or preferential tariffs on exports, following the nation’s exclusion from the Regional Comprehensive Economic Partnership (RCEP) which was signed by 15 Asia-Pacific nations on Nov. 15, they said at a meeting with the Ministry of Economic Affairs (MOEA). Some participants said that the NT dollar’s
BREATH OF LIFE: The firm said the under-utilized plant should start mass production in the first quarter, timed to coincide with Intel Corp’s release of its Ice Lake server chip Hon Hai Precision Industry Co (鴻海精密) plans to assemble key components for Google servers at its plant in Wisconsin, people familiar with the matter said, finally breathing life into a factory that US President Donald Trump hailed as crucial to bringing manufacturing back to the US. The company has decided to locate production for this new contract at the existing complex rather than make the components at home or in China, the people said, asking not to be identified. The under-utilized plant should start mass production in the first quarter, timed with the release of Intel Corp’s Ice Lake server chips,