WITH 95pc of the state¹s grain bound for export markets where the American dollar is the predominant trading currency, the strengthening Australian dollar will undoubtedly have an impact on WA growers.
Agriculture Department economist Ross Kingwell said the Australian dollar¹s recent 10c appreciation had already cost wheat farmers $30-$40/tonne.
³But some of the effects of the appreciating dollar could be offset by tight global wheat stocks and good local yields,² he said.
Although stocks were at a 15-year low, Dr Kingwell pointed out that world wheat supplies had never run out.
³While stocks are sufficient, there will not be panic buying,² he said.
³Now that the market place is deregulated, the major grain purchasers are commercial firms, rather than governments securing food stocks.²
Dr Kingwell said US wheat plantings were ahead of schedule and the crop quality was said to be favourable.
Devaluation of the American dollar will make US growers more competitive.
³The US Department of Agriculture is predicting stable wheat prices, in contrast to last year when the price spiked,² he said.
³Wheat and canola is traded in American dollars but lupin prices tend to be 70pc of soy prices.²
AWB state manager Lisa Wilson said changes in currency were a significant factor given the state¹s dependence on exports.
³AWB is an active hedger of currency, reducing grower risk and maximising returns,² she said.
³The 2001/02 pool had been well hedged, we have good coverage on the 2002/03 pool and we have started hedging for the 2003/04 pool.²
Global wheat production during 2003/04 is expected to be 569.5mt, with consumption at 591.4mt, leaving stocks of 134.5mt.
The USDA predicts that world wheat trade will increase by 29mt (27pc) in the period 2003 to 2012.
Africa, the Middle East and Asia - in particular China, Brazil, Algeria, Egypt, Philippines and Indonesia are thought to be the future growth markets for wheat imports.
The US, the European Union, Canada, Argentina and Australia will account for 75pc of world wheat trade up to 2012, down from 83pc in the 1996 to 2001 period.