Global grains markets look to Australia
All eyes are on Australia’s developing winter crop as the global grains markets look to our farmers to offset a poor European harvest hit by drought.
Agribusiness specialist Rabobank’s London-based global grains and oilseeds strategist Stefan Vogel says that when it comes to wheat and canola in particular, “we are all looking for good crops in Australia to make up the shortfall caused by the poor season in Europe”.
After an excellent 2019/20 European harvest, this year’s EU export volumes are set to fall, with most European grain-growing nations beset by dry conditions and poor yields.
“So who can offset that shortfall in European production that would be going into export markets?” Vogel asks. “Everyone is banking on Australia to make that happen on the world market because no one else has a whole lot of buffer to make that up.”
For canola, a poor harvest in Europe will likely see the European Union producing its lowest crop since 2006 in the 2020/21 season. And this also spells good news for Australia, pushing EU import demand to likely exceed last season’s record high. This will potentially see Europe double its volume of canola imports from Australia.
“Europe is actually going to need a lot of Australian canola – depending on how much you can ship to us, maybe close to doubling the amount we took last year and getting back to volumes seen in 2017 and 2015 of around 1.9 million tonnes,” Vogel says.
Rabobank Australian senior grains and oilseeds analyst Cheryl Kalisch Gordon says the bank maintains a positive outlook on the year ahead for Australian grain growers.
While Rabobank had slightly revised down its forecast 2020/21 wheat production due to dryness in some production areas, Gordon says Australia would be back as a significant player on the global grain export markets this year: “With production prospects higher for grain growers in most areas, it will be a year that will start to make up (although not entirely) for the troubling years we’ve had recently,” she says.