Drought hit Australia to import wheat for first time in a decade

11 June 20192 min reading

Widespread drought has forced Australia to make a rare purchase of Canadian grain – its first wheat import in more than a decade. Australia is normally the biggest wheat exporter in the Southern Hemisphere, but the prolonged drought has fried wheat in parts of the country.

An Australian importer was issued a permit to ship bulk wheat from Canada, the Australian Department of Agriculture & Water Resources said on its website, after local crops were ravaged by the lack of rain. The permit is for a single shipment, which is expected to arrive in six to eight weeks.

While Australia does import small quantities of specialty wheat grades each year, a bulk shipment like this is significant because it’s so rare. It comes after east coast prices rose as high as $450 a tonne last year, making it among the most expensive markets in the world. Australia last imported wheat in 2007 when an El Nino weather event led to a severe drought and cut production to around half of the typical annual output.

Australia is normally the biggest wheat exporter in the Southern Hemisphere, but the prolonged drought has fried wheat and other grain crops in parts of Australia. In the most recent season, output tumbled 20 per cent to just over 17 million tons, the lowest in more than a decade, a unit of the US Department of Agriculture said in a report posted on its website. The combined wheat output from New South Wales, Victoria and Queensland was down by 45% from the previous season to 4.15 million tons. Winter crop production in Australia is forecast to drop to 29.3m tons in 2018-2019, 20% below the 20-year long-term average, because of severe drought conditions in Victoria, New South Wales and parts of South Australia and Queensland.

The decision comes a week after ASX-listed agribusiness Graincorp revealed it incurred a $59 million half-year statutory net loss as farmers battled the severe drought conditions.Australian production is expected to pick up in the coming season that’s now being planted, with the US Department of Agriculture forecasting a crop of 20 million tons. Winter crops such as wheat may have received a boost from recent rain in New South Wales and Victoria, but soil conditions remain dry for this time of year.

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