ABS cuts 5 million mt from Australia’s 2016/17 wheat production

The Australian Bureau of Statistics (ABS) on Tuesday cut its wheat production estimate for the 2016/17 marketing year by 5 million mt to 30.36 million mt, a move that could cut exports from one of the world's main wheat suppliers to Asia.

The reduction will have a notable impact on carryover stocks in Australia, erasing a large portion of its surplus and putting pressure on the available export supply for the 2017/18 marketing year.

While the 2016/17 marketing year saw a bumper crop, 2017/18 is forecast to be much leaner, with production set to drop 42% year-on-year to 20.27 million mt, according to the ministry of agriculture.

With the Australian Bureau of Agricultural and Resource Economics and Sciences (ABARES) putting domestic consumption in the region of 8.2 million mt last year, 2016/17’s 22.61 million mt of exports are likely to be reduced significantly as domestic consumption takes priority over overseas sales.

Prices for the new crop have only seen a modest rise to date, however, with the Agricensus APW assessment up from a low of $225/mt FOB Western Australia on December 10 to $232/mt FOB by January 8.

The adjustment puts ABS at odds with the assessment of the ministry of agriculture, which still carries a higher figure.

In December, ABARES said total wheat production for the 2016/17 marketing year came in at 35.01 million mt.

ABARES is not scheduled to update its crop production figures until mid-February.