7 Reasons Why Australia is a Global Leader in Grain Exports
Australia is one of the world’s largest exporters of grain, especially wheat, barley and canola. In 2022–23, the value of Australian farm exports is set to break a new record of $65 billion, according to the national commodity forecaster ABARES. Here are some of the reasons why Australia is a global leader in grain exports.
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1. High-quality grain
Australian grain is known for its high quality, consistency and reliability. Australian wheat has excellent milling and baking properties, making it suitable for a range of products such as bread, noodles, pasta and biscuits. Australian barley is sought after for malting and brewing, as well as for animal feed. Australian canola has a low level of erucic acid and glucosinolates, making it ideal for edible oil and biodiesel production.
2. Diverse production regions
Australia has a diverse range of grain production regions, spanning from Western Australia to Queensland, and from Tasmania to the Northern Territory. This diversity allows Australia to produce different types of grain that suit different markets and climates. For example, Western Australia produces mainly hard wheat for Asian markets, while Queensland produces mainly soft wheat for domestic feed use.
3. Innovative farmers
Australian farmers are innovative and adaptable, constantly adopting new technologies and practices to improve their productivity and sustainability. Australian farmers use precision agriculture, digital tools, biotechnology, irrigation, conservation tillage and integrated pest management to optimize their crop performance and reduce their environmental impact.
4. Strong research and development
Australia has a strong research and development (R&D) sector that supports the grain industry. The Grains Research and Development Corporation (GRDC) is a statutory authority that invests in R&D on behalf of Australian grain growers and the government. The GRDC funds research projects on crop breeding, agronomy, pest and disease management, post-harvest quality, biosecurity, climate change adaptation and market access.
5. Competitive supply chain
Australia has a competitive and efficient supply chain that delivers grain from farm to port in a timely and cost-effective manner. Australia has over 20 major grain export terminals, with a combined storage capacity of over 15 million tons. Australia also has an extensive rail and road network that connects the production regions with the export terminals. Australia’s grain export industry is regulated by the Wheat Port Code of Conduct, which ensures fair and transparent access to port facilities for all exporters.
6. Diversified markets
Australia has diversified its grain export markets over the years, reducing its reliance on any single market. Australia exports grain to over 50 countries, with the top five destinations being China, Indonesia, Japan, Vietnam and South Korea. Australia also has free trade agreements (FTAs) with many of its key trading partners, such as China-Australia FTA (ChAFTA), Indonesia-Australia Comprehensive Economic Partnership Agreement (IA-CEPA) and Japan-Australia Economic Partnership Agreement (JAEPA), which provide preferential market access for Australian grain.
7. Resilient industry
Australia has a resilient grain industry that can cope with challenges such as droughts, floods, pests, diseases and trade disputes. Australia has experienced several severe droughts in the past two decades, which have reduced its grain production and exports. However, Australia has also benefited from favourable weather conditions in recent years, such as La Niña, which have boosted its grain production and exports to record levels. Australia has also faced some trade tensions with some of its major markets, such as China’s imposition of tariffs on Australian barley in 2020. However, Australia has managed to find alternative markets for its grain, such as Saudi Arabia and India.
Aust grain exports: Trends and outlook
Australia is one of the world’s largest exporters of grains, especially wheat, barley and canola. The value of Australian grain exports depends on both the volume and the price of production, which are influenced by domestic and global factors such as weather, demand, supply, trade policies and exchange rates. In this blog post, we will examine some of the recent trends and outlook for the Australian grain industry, based on the latest data and forecasts from the Department of Agriculture, Fisheries and Forestry (DAFF).
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Record production and export value in 2022–23
According to DAFF, the value of Australian grain production is estimated to reach a record high of $38.6 billion in 2022–23, an increase of 35% from the previous year. This is mainly driven by a bumper harvest of wheat, barley and canola, which benefited from favourable seasonal conditions across most cropping regions. The national wheat crop is estimated to be 38.8 million tons, the second largest on record after the 2016–17 crop. Barley production is estimated to be 14.4 million tons, the largest ever recorded. Canola production is estimated to be 6.3 million tons, also a record high.
The value of Australian grain exports is also forecast to reach a record high of $36.4 billion in 2022–23, an increase of 40% from the previous year. This reflects both the higher production and the higher prices for most grains in the global market. The value of wheat exports is forecast to be $14.2 billion, an increase of 49% from the previous year. The value of barley exports is forecast to be $4.5 billion, an increase of 58%. The value of canola exports is forecast to be $4.8 billion, an increase of 81%.
The high prices for grains in 2022–23 are largely due to strong global demand, especially from China, which has increased its imports of grains to replenish its stocks and feed its livestock sector. China is the largest market for Australian barley and canola, accounting for 77% and 68% of Australia’s exports respectively in 2021–22. China is also a significant market for Australian wheat, accounting for 15% of Australia’s exports in 2021–22.
Lower production and export value in 2023–24
DAFF forecasts that the value of Australian grain production will fall by 14% to $33.1 billion in 2023–24, reflecting lower expected yields due to a return to more average seasonal conditions. The national wheat crop is forecast to be 30 million tons, a decrease of 23% from the previous year. Barley production is forecast to be 10 million tons, a decrease of 31%. Canola production is forecast to be 4 million tons, a decrease of 37%.
The value of Australian grain exports is also forecast to fall by 17% to $30.2 billion in 2023–24, reflecting lower production and lower prices for most grains in the global market. The value of wheat exports is forecast to be $10.8 billion, a decrease of 24% from the previous year. The value of barley exports is forecast to be $3 billion, a decrease of 33%. The value of canola exports is forecast to be $3.4 billion, a decrease of 29%.
The lower prices for grains in 2023–24 are largely due to higher global supply, as major exporters such as Russia, Ukraine, Canada and the United States are expected to increase their production and exports in response to the high prices in 2022–23. Global demand for grains is also expected to moderate in 2023–24, as China reduces its imports and rebuilds its stocks.
The Australian grain industry has experienced a remarkable year in 2022–23, with record production and export value driven by favourable weather and strong global demand. However, this performance is unlikely to be repeated in 2023–24, as more average seasonal conditions and lower global prices are expected to reduce both the volume and the value of production and exports. Nevertheless, the outlook for the Australian grain industry remains positive in the medium term, as Australia maintains its competitive advantage in producing high-quality grains that meet the needs of diverse markets.
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