Australia has lowered its wheat export forecast for 2019-20 by nearly 18% as drought continues to plague the world’s fourth largest wheat exporter.
The Australian Bureau of Agricultural and Resource Economics and Sciences (ABARES) forecast wheat exports of 11.7 million tonnes in the crop year that begins in July, down from its March estimate of 14.2 million tonnes.
Lower Australian exports will support global benchmark prices, which have rallied nearly 30% over the last six weeks amid concerns over tighter global supplies.
ABARES in a March 4 report said wheat production in Australia during the drought-plagued 2018-19 season totaled 17.3 million tonnes, which was the smallest crop in a decade for the world’s fourth largest wheat exporter.
The decline in production in 2018-19 was due to a drought that affected New South Wales and Queensland, two of the biggest grain-producing states in Australia.
Australia’s 10-year average for wheat production is 24.4 million tonnes, ABARES noted.