OVER the years globalisation has seen an increase in the volume of goods traded around the world and grain is no exception.
The United States Department of Agriculture (USDA) groups Argentina, Australia, Canada, the European Union, Russia and Ukraine as the six major wheat exporters.
Since 2000, the volume of wheat exported by these six countries has increased by 139 per cent.
Meanwhile, wheat end stocks for these six combined is estimated at 33.21 million tonnes for 2021, 18pc below the long-term average between 2000 and 2020 of 40.48mt.
As export demand has grown, countries have drawn down their stockpiles.
In the period from 2000-2020, cumulative production for these six nations only increased by 33pc, not enough to satisfy elevated export volumes and keep a healthy buffer.
As a result, the tightening global balance sheet has contributed to increased world wheat prices which Australian growers are benefitting from.
Below we look at the state of play for each major wheat exporter.
Argentina
Despite some dry conditions and moisture deficit during the growing season, Argentina is looking at a record wheat production year of 20mt according to the USDA.
Recent rainfall has improved yield estimates with the Rosario Grain Exchange updating its estimates to 20.7mt.
Wheat exports from Argentina have been stable over the last five years, averaging 12.5mt.
Australia
With harvest underway, Australia is in for another large wheat production year, estimated at 31.5mt.
The last couple of favourable seasons has seen Australian wheat exports rebound following the drought years.
The majority of Australian grain goes to the export market so when there is a string of poor production years, it does impact global trade flows.
Fortunately, Australian graingrowers will be able to capitalise on the confluence of high production and prices this year.
Canada
Canada has had a very difficult production year with wheat and canola exports diminished as a result.
Canadian wheat exports are estimated at 15mt, the lowest since 2002.
Strong Australian prices for cereals and canola are partly driven by the deficit out of Canada.
European Union
After a challenging 2020 season, the European Union has had better production in 2021 with wheat production up 11pc year on year.
Interestingly, wheat exports are up 19pc over the same period with strong demand and improved production increasing export volumes.
Russia
Russia has been the big mover over the last two decades with less than one million tonnes of wheat exported in 2000, to averaging over 35mt of wheat exports in the last five years.
Russian production was trimmed back by the USDA to 72.5mt this season.
Production issues have reduced wheat export estimates out of Russia, as has the wheat export duty.
Ukraine
Ukraine has had its strongest production year in 2021, with an estimated 33mt produced.
This has resulted in their export volume being raised to an estimated 23.5mt.
Much like Russia, Ukrainian exports have been trending higher, especially in the last decade.
Improved export infrastructure, better agronomy practices and the move towards economies of scale will continue to see Ukraine wheat exports increase in the years to come.
- More information: Go to profarmergrain.com.au or call 1300 302 143.
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