Production

In 2015/16, wheat production is expected to increase to 24 million tons, as a result of an expansion in the planted area, assuming average rainfall. Yields are expected to be stable at 1.7 tons per hectare. Wheat is the major winter crop in Australia, with sowing starting in autumn and harvesting, in spring and summer. Harvesting starts in central Queensland during August and progresses down the east coast to Victoria, finishing during January. On the west coast, the wheat harvest starts during October and is completed during January. The main producing states are Western Australia, NSW, South Australia, Victoria and Queensland. Major types of wheat include Prime Hard, Hard, Premium White, Standard, Soft and Durum, based on protein, grain size and moisture content and each grain has different end-uses.

Consumption

Wheat is Australia's major grain crop and is used for human consumption in the production of breads, noodles and pastas. Lower quality wheat is used as stock feed while some waste wheat starch is used to manufacture biofuel. In recent years, prices for feed grain have increased because of the record number of cattle in lot feeding facilities. This trend has also led to compression of price margins between different quality grades of wheat with even prime wheat bought for feed grain. As a result of this trend, the volume of wheat allocated to the feed market has been increased by 300,000 tons in Post estimates.

Wheat consumption in Australia has been stable in recent years with around 70 kg of flour per capita consumed on average over the past decade. Flour producers face a mature domestic market. The biggest milling companies in Australia are Allied Mills, George Weston Foods and Manildra.

Trade

Exports in 2015/16 are expected to reach 17 million tons. Australia is the seventh largest wheat producer in the world and the fourth largest exporter. Around 80 per cent of Australian wheat production is exported, with WA the leading State. Around half of wheat grown in eastern Australia is consumed locally, while 90 per cent of grain produced in Western Australia and South Australia is exported. The major export markets are in the Asian and Middle East regions and include Indonesia, Japan, South Korea, Malaysia, Vietnam and Sudan.

Australia has the capacity to export wheat in the December to May marketing window when the northern hemisphere season is ending. During this period, seasonal demand for grain, rail and port services and shipping slots increases significantly and a queuing system has been used for bulk grain exporters.

A number of trade agreements have increased market access into Asia for Australian wheat exporters. In mid-January 2015, the Japan–Australia Economic Partnership Agreement (JAEPA) came into force making exports of feed wheat to Japan tariff free. In December 2014 the Korea–Australia Free Trade Agreement (KAFTA) entered into force. Under KAFTA, the 1.8 percent to 3 percent tariff on wheat was eliminated on commencement of the agreement. These changes are expected to strengthen bilateral trade with Japan and South Korea.

Under the China-Australia FTA (CHafta), Australian exports of wheat into the Chinese market have not been given additional access. However, Australian exporters have access to tariff quotas for wheat imports into the Chinese market which were established when China joined the WTO in 2001.

Australian Wheat Exports by country, 2010-2104 ('000 metric tons)

2010

2011

2012

2013

2014

World

15,852

19,684

23,530

18,009

18,251

Indonesia

3,707

3,578

4,585

3,665

4,072

Iraq

247

1,022

561

1,724

810

Vietnam

1,309

2,402

1,992

1,347

1,378

Japan

1,074

1,263

1,367

947

932

South Korea

957

1,935

2,072

892

1,061

China

705

794

2,283

870

1198

Sudan

627

568

813

849

558

Yemen

937

713

859

816

850

Malaysia

810

951

934

721

1,050

Iran

61

0

848

652

1,048

Export market share (%)

100.0

100.0

100.0

100.0

100.0

Indonesia

23.4

18.2

19.5

20.4

22.3

Iraq

1.6

5.2

2.4

9.6

4.4

Vietnam

8.3

12.2

8.5

7.5

7.6

Japan

6.8

6.4

5.8

5.3

5.1

South Korea

6.0

9.8

8.8

5.0

5.8

China

4.4

4.0

9.7

4.8

6.6

Sudan

4.0

2.9

3.5

4.7

3.1

Yemen

5.9

3.6

3.7

4.5

4.7

Malaysia

5.1

3.3

4.0

4.0

5.8

Iran

0.4

0

3.6

3.6

5.7

Note: Calendar years.

Source: Global Trade Atlas

Wheat

2013/2014

2014/2015

2015/2016

Market Begin Year

Oct 2013

Oct 2014

Oct 2015

Australia

USDA Official

New post

USDA Official

New post

USDA Official

New post

Area Harvested

13,473

13,473

13,800

13,808

0

13,900

Beginning Stocks

4,654

4,654

6,162

6,162

0

6,412

Production

26,929

26,929

24,000

23,600

0

24,000

MY Imports

150

150

150

150

0

150

TY Imports

151

151

150

150

0

150

TY Imp. from U.S.

3

3

0

0

0

0

Total Supply

31,733

31,733

30,312

29,912

0

30,562

MY Exports

18,621

18,621

17,000

16,500

0

17,000

TY Exports

18,339

18,336

17,500

16,944

0

17,000

Feed and Residual

3,600

3,600

4,100

3,600

0

3,900

FSI Consumption

3,350

3,350

3,400

3,400

0

3,400

Total Consumption

6,950

6,950

7,500

7,000

0

7,300

Ending Stocks

6,162

6,162

5,812

6,412

0

6,262

Total Distribution

31,733

31,733

30,312

29,912

0

30,562

1000 HA, 1000 MT, MT/HA