ES dry hits grain

18 May, 2005 08:45 PM
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THERE could be more interest in Grain Licencing Authority (GLA) export licences for canola and barley if drought conditions in eastern Australia continue.

Grain prices have been rising as the drought in NSW, Victoria and South Australia deepened, although Profarmer market analyst Dennis Wise said it was too early to hit the panic button.

Mr Wise said AWB Multi V prices in Melbourne, Newcastle and Adelaide were running at about $10-$15/t more than Fremantle.

He said canola prices had firmed in eastern Australia, with prices jumping by $5t-$10t more than export parity, and expected more demand for GLA barley and canola licences.

Patches of rain in Queensland and northern NSW were expected to dampen the price in spikes on feed grain, although this would provide only temporary relief for buyers if the drought didn't ease.

The Qld grain belt has received up to 50mm of rain in the past two weeks.

Grain Pool senior trading manager Josh Roberts said while there was a potential reduction in global supply, he did not think a drought in eastern Australia would affect world prices.

However, Mr Roberts said if the drought continued, WA feed, canola and barley prices could rise to a level where it was feasible to ship it to eastern Australia for the domestic market.

Mr Roberts said it also was possible there could be an increase in demand for GLA bulk export licences if traders could not source enough canola or barley in eastern Australia to supply their overseas customers.

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