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Australian wheat output to rise 23% on year in 2019-20: ABARES

New Delhi — Major producer Australia's wheat output could grow 23% on the year to 21.2 million mt in the 2019-20 marketing year (October-September) mainly because production was hit by adverse weather in 2018-19, the Australian Bureau of Agricultural and Resource Economics (ABARES) said Wednesday.

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Australia's east coast has had dry conditions since 2016 when an El Nino event disrupted the weather, cutting wheat production for two straight years.

Australian wheat production has dropped considerably from 31.8 million mt in 2016-17 to 20.9 million mt in 2017-18, and 17.3 million mt in 2018-19, according to the latest US Department of Agriculture report.

Due to the severe drought, Australia recently allowed wheat imports for the first time in 12 years. Manlidra Group, the company which is buying the wheat from Canada, told S&P Global Platts it would be first time in its 67-year history that it has had to import wheat into Australia.

ABARES 2019-20 wheat production estimates are close to the latest USDA estimate for Australia, which is 22.5 million mt.

The increase comes despite below-average crop expectations in the two big wheat-producing states, Western Australia and New South Wales because of the dry weather.

Western Australia in particular has had a dry summer and autumn, with the state's grain belt receiving below rainfall over the past six months.

"The chance for average grain yields across the medium and lower rainfall regions [in Western Australia] has diminished in [May] as opening rains have only been received by most growers in the last few days," the Grain Industry Association of Western Australia said Monday.

"The later-than-ideal start to the growing season for most and lack of sub-soil moisture means that winter and spring are going to need to be better-than-normal to return average grain yields," GIWA added.

Western Australia produces most of Australia's wheat, with production expected to be 8.2 million mt in 2019-20, according to ABARES.

GIWA reduced crop area estimates for Western Australia for 2019, saying the wheat area could be historically low at less than 52% of the total crop area.

However, the area planted to wheat across Australia is expected to rise 8% on the year to 11 million hectares, according to ABARES' latest report.

USDA earlier estimated wheat area would be 12 million ha, up 17% on the year, in part due to some farmers switching to wheat from barley.

--Rohan Somwanshi, rohan.somwanshi@spglobal.com

--Edited by Jonathan Dart, newsdesk@spglobal.com