Disruptions from Black Sea suppliers have left the world’s biggest importers searching for wheat. Australia and India have ample exportable grain supplies to partially offset cuts to Black Sea exports.

With record production, the United States Department of Agriculture (USDA) hiked up Australia’s 2021/22 export forecast 1.0 million tons to 27.0 million, an all-time high for the July-June trade year. Disruptions from Black Sea suppliers have left the world’s biggest importers searching for wheat. With two consecutive bumper crops, Australia has ample exportable grain supplies. Although typically focused on key Asia markets, Australian exporters will likely seek out customers in the Mediterranean and Africa this year.

Australia has exported 13.2 million tons of wheat year-to-date (July-January), which means exports will have to average 2.7 million tons per month to reach the revised forecast. Historically, 2.7 million tons has been the maximum per month, but exports have been at very high levels since December 2020 and exceeded 2.7 million in January. A few smaller ports have come online in the past couple of years in South Australia. Additional export capacity is being opened in Western Australia, which should allow an accelerated export pace in final 4 months of the trade year. Reports from major Australian traders indicate that buyers are covering purchases further out than typical. Australian shipping slots are fully booked for months in advance and shipments for new-crop wheat are being booked already.

USDA also increased its exports forecast for Indian wheat by 3.0 million tons to 10.0 million, which would also be a record. With the Russian invasion of Ukraine, export demand for India’s wheat has accelerated. In the new marketing year (MY) 2022/23 beginning in April, fresh supplies will be available in addition to the exceptionally large stocks in the country. While exports have tended to be mostly to neighboring countries including Bangladesh and some markets in the Middle East, India is likely to find buyers across Africa and other parts of the Middle East. Transit time to the Middle East would be longer compared to Black Sea exporters, but India is well-positioned to step in as a low-cost supplier. From July through January, India has exported 5.2 million tons, primarily to Bangladesh. Exports since October have averaged over 900,000 tons per month and India is expected to maintain this pace.

Notwithstanding the conflict in Ukraine, tightening global supplies and high prices from major exporters have made India wheat competitive for the first time in several years. After five consecutive record crops and rising government wheat inventories, India has ample exportable supplies. Indian wheat export prices averaged an attractive $312/ton in January and have the advantage of low freight rates to markets in the Middle East and South Asia. Exports are forecast to be more than double last year’s volume and 20 times levels from 2 years ago. The last time India was a significant exporter was in 2012/13 when Russia and Ukraine had production shortfalls from drought.