″Excess carryover from 2021-22, together with another above-average harvest and strong global demand, means … Australia could export around 26 million tonnes of wheat again in 2022-23, almost 50per cent above the 10-year average and more than 50 per cent above the five-year average,″ RaboResearch senior commodities analyst Cheryl Kalisch Gordon said.
Separately, ANZ Bank analysts warned global grain stocks were being depleted rapidly following poor harvests due to bad weather from La Niña, and that increased planting and getting more grain out of the Black Sea region supplied by Russia and Ukraine was key to alleviating the food crisis in the short term.
The bank said the war could further increase the 660 million people the United Nations expected to still be facing hunger in 2030.
“The level of global inventories looks precarious, with the exception of China, as it currently holds much of the world’s grain reserves,” said ANZ Commodity strategist Soni Kumari, adding that China had been stockpiling soft commodities in recent years.
“Food crisis is triggering food protectionism, which is worsening supply disruptions and pushing soft commodity prices higher.
“Trade restrictions have also been imposed on fertilisers by Russia and China [and] higher energy and other input prices are further adding to producers’ woes.”
Ukraine and Russia account for a combined 20-30 per cent of global exports of several soft commodities, including wheat and corn, and the conflict has kept prices high. India, one of the world’s largest wheat producers, recently also banned most exports of the grain.
In good news for farmers, Rabobank predicted the prices of farm inputs, such as fertilisers, have peaked.
It added that global stocks of grains and oilseeds would move even lower in the coming year, supporting elevated global prices through 2022-23.
It said even without the Russia-Ukraine war, markets would be tight, meaning prices would remain above average even if there was a ceasefire.
However, Dr Kalisch Gordon said local prices for wheat, barley and canola would continue to trade at a discount to global prices primarily because of the large amount of local supply following record production and supply chains running at full capacity.
The bank expects Australian premium white wheat track prices to trade at an average above $400 a tonne over the balance of the year.