Domestic grain values continue to climb higher as exporters report a surge of inquiries from overseas buyers as the flow of Black Sea exports grinds to a halt forcing buyers to chase alternative supplies.
Australian-based grain exporters are fielding a flood of fresh inquiries from global buyers that would normally source wheat and barley supplies from Ukraine and Russia. Together, these two countries account for 25 per cent of global wheat exports and more than 30pc of barley.
Fresh export inquires, as well as surging global futures markets, have helped push east coast wheat and barley values higher in recent weeks. Wheat and barley prices were up $20-30 last week across Queensland, NSW, and Victoria. Delivered wheat, barley and sorghum bids into southern Queensland markets jumped by $20 a tonne.
International grain markets have rocketed higher in recent weeks on the escalating Black Sea conflict. Local markets haven't reflected the full extent of the overseas price increases as shipping capacity with exports already running at capacity before Russia invaded Ukraine.
Most of the new inquiries are coming from the Middle East and Africa which are heavily reliant on Black Sea grain. Asian buyers are well covered with Australian and Indian wheat into the middle of the year. Australia's shipping capacity is also fully committed for the first half of the year on existing sales which means traders are unable to make up for shortfalls from Ukraine and Russia to buyers in the Middle East and Africa.
Some countries have moved to stop or slow grain exports amid fears of domestic shortages. Hungary banned all grain exports on Friday.
Australia's grain exports swung into overdrive in January. Australia's combined wheat, barley and canola exports for January were 4.15 million tonnes. The January total was modestly lower than the record monthly high reached in 2017. Australian wheat exports for January were 2.77mt while canola exports were an impressive 763,000 tonnes.
An inevitable shortfall in Black Sea grain supplies is expected to see Australian grain exports continue at capacity well into next year.
New crop grain prices also pushed sharply higher last week. Black Sea grain shortages will not be quickly resolved, keeping global cash markets well supported.
- Details: 0428 116 438 or lloyd@agscientia.com.au
