Low rainfall could halve the wheat crop in Australia's largest
wheat exporting state in the 2012-13 crop year, according to
forecasts by one of Australia's largest banks, hurting farmers at a
time when world grain prices have shot up to near record peaks.
ANZ senior agricultural analyst Paul Deane said Western
Australia's wheat output could fall to 6 million metric tons in the
crop year that started on April 1--almost half of the 11.6 million
tons grown last year and down from his current forecast of 8
million tons--if plants don't get rain over the next month.
Latest official government forecasts from June expect a Western
Australia winter wheat crop of about 8.6 million tons.
"Yield potential is already well below trend in the northern and
eastern wheatbelt due to the late start to the season and one of
the driest Julys on record," Mr. Deane said. "Production prospects
for the Western Australian wheat crop are delicately poised," he
added.
Wheat prices have already risen about A$100 a ton over the past
three months as drought in the U.S. and Russia--two of the world's
largest wheat producers--has sparked fears of tighter world
supplies during the 2012-13 crop year. This season's multi-milling
wheat delivered from Geraldon, West Australia, is currently trading
at A$340 a ton, according to AWB, Cargill Inc.'s Australian
unit.
National Australia Bank analysts predict that Australian farmers
could find themselves 6 billion Australian dollars (US$6.3 billion)
richer this year if they are able to meet government June
projections for rural exports of A$38 billion.
High stocks left over from a bumper wheat crop out of Western
Australia last year could help farmers to compensate for any
shortfall this year.
ANZ's Mr. Deane said he expects exports in 2012-13 to remain
roughly on par with 2011-12 at around 8.5 million tons--just below
the record 9 million shipped in 2003-04--due to the unprecedented
levels of carryover stocks left from the previous season.
"Even with this strong level of exports, Western Australia will
still have record stocks to carry into the next season," he said.
"This provides a significant buffer to export availability even
with an adverse production outcome," he added.
Write to Caroline Henshaw at caroline.henshaw@wsj.com
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