Australia's wheat exports experience major decline in 2024

February 02, 2025 — Australia holds a significant place in the international wheat industry, recognized for its premium quality grain and dependable supply. Nonetheless, the wheat sector is influenced by unpredictable weather, global consumption trends, and foreign competition, leading to variations in both production and export figures. Recent statistics indicate a notable drop in Australian wheat exports, reflecting the evolving challenges within this crucial industry.

A massive 45% reduction in export value

Data from the Australian Department of Foreign Affairs and Trade shows that the value of wheat exports from Australia nosedived to AUD 8.1 billion for the 12 months to November 2024. This marks a dramatic 45% decline from AUD 14.7 billion during the same timeframe in 2023. Such a steep reduction emphasizes the difficulties the Australian wheat sector has endured in the past year.

Lower exports to all key markets

The exports were lower to all major export destinations. China is Australia’s largest wheat export destination with nearly a quarter of market share (in 2023). Exports to China were 59% lower in the 12 months to 2024 compared to the same timeframe a year earlier. Exports to other important markets, such as Indonesia (down 37%), the Philippines (down 28%), South Korea (down 55%), and Vietnam (down 66%), also saw significant reductions.

Key reasons for the drop in export values

One of the primary factors contributing to this decline is a sharp drop in domestic wheat production. Falling wheat prices also played a role in the lowered export value for Australian wheat in 2024.

Reduction in domestic wheat production

Following a record-high production of 40 million tonnes in FY 2022-23, due to exceptionally favourable weather, wheat production is estimated to have fallen to about 26 million tonnes in FY 2023-24, according to the Australian Bureau of Agricultural and Resource Economics and Sciences (ABARES). While the earlier figure was an extraordinary peak, the current production level, although significantly reduced, is still relatively close to the ten-year average, indicating a return to more standard production levels.

What are Australia’s main wheat growing regions?

Australia's primary wheat-producing regions are distributed across the nation, contributing to the total output. According to the Department of Agriculture, Fisheries and Forestry, the key states that grow wheat are Western Australia, New South Wales, South Australia, Victoria, and Queensland.

Falling wheat prices in the global markets

The global wheat prices saw considerable volatility over the past two years. Prices rose to record highs influenced by geopolitical crises, then to subsequent drops caused by increased supply and changing demand.

In 2022, wheat prices soared, peaking in March. This surge was primarily driven by the Ukraine conflict, a major wheat exporter. Disruptions in Ukrainian wheat production and exports, along with sanctions on Russia—another key market player—led to significant concerns over supply. The uncertainty around global wheat availability resulted in panic buying, propelling prices to one of the highest levels in recent history.

However, the soaring prices of 2022 were not sustainable. As the immediate shock of the Ukraine crisis wore off, the market adjusted accordingly. Increased wheat yields in other wheat-producing countries, including Australia, and the search for alternative supply sources began to ease some of the supply pressures. Concerns over a potential global economic slowdown, which could hamper demand for agricultural goods, further contributed to the downward price trend.

In 2023, the downward trajectory continued, with wheat prices gradually declining from the previous year's high values. This drop was attributed to various factors, including improved global wheat production and alleviation of supply chain difficulties. The increased availability of wheat from other exporting nations helped counterbalance the decreased supply from Ukraine.

Additionally, the global economic outlook has significantly influenced wheat price dynamics. Fears regarding a potential global economic slowdown and its ramifications for agricultural commodity demand added further downward pressure on prices.

Who are the major wheat exporters in the world?

The global wheat market is a complex web of production, consumption, and trade, dominated by a select group of exporting nations that significantly impact global prices, food security, and international relationships.

Historically, the wheat trade has been led by five key players: the United States, Canada, Australia, the European Union, and Argentina. These countries benefit from vast farmland, favourable climates for wheat growth, and advanced agricultural infrastructures, enabling them to produce substantial surpluses for export.

The United States stands out as a reliable supplier of diverse wheat types due to its varied farming regions. Export levels often fluctuate based on domestic demands, weather conditions, and international trade agreements.

Canada is recognized for its premium spring wheat, contributing significantly to the global market with its extensive agricultural lands and efficient transport networks.

Australia, despite occasional droughts, remains a major wheat exporter, particularly focused on Asian markets. Its production is concentrated in certain areas, adapting its export strategies to cater to the specific needs of its trading partners.

The European Union, while a major wheat producer, functions as both an importer and exporter. Internal trade dynamics and export subsidies influence its role in the international market.

Argentina benefits from its fertile Pampas region, playing an essential role in the wheat trade, though its export volumes may vary based on domestic policies and economic circumstances.

Recently, other countries have emerged as significant wheat exporters, diversifying the global export landscape. Russia has asserted itself as a formidable player, drawing on its vast land resources and competitive pricing to capture a larger share of the market. Ukraine, despite ongoing conflicts, remains an important contributor, underscoring the value of its fertile land in global wheat supply.

These exporting nations are pivotal in securing global food supply. Their production and export capabilities help satisfy the increasing global demand for this essential grain. However, the wheat trade remains vulnerable to various factors like weather fluctuations, geopolitical issues, and economic conditions, which can lead to price instability and potential supply challenges.

The concentration of wheat exports among a few key countries raises concerns about dependency and exposure. Importing nations rely heavily on these exporters to meet their wheat requirements, and any supply disruptions can significantly affect food security and price stability. This reality reinforces the need for diversifying supply sources and fostering international cooperation to navigate potential risks.

Key Australian wheat export businesses

Australia's reputation for high-quality wheat and its reliable supply chain position it as a vital player in the global grain market. This success is bolstered by several leading export companies that connect local farmers with international buyers. These firms, equipped with expertise in logistics, marketing, and risk management, play a crucial role in shaping the landscape of Australian wheat exports.

Once monopolized by the Australian Wheat Board (AWB), the market is now more diverse due to deregulation, with various companies participating in wheat exports, each offering unique strengths and specializations.

Cooperative Bulk Handling (CBH) is a significant competitor in the Australian wheat export sector, particularly in Western Australia, where it leads the regional grain industry.

Another notable player is Agracom, a grain trading firm focused on exporting to Southeast and East Asia, especially China. Agracom utilizes its regional presence and partnerships within the Australian grain community to source wheat from a broad network of producers across key regions. Their commitment to service, competitive pricing, and dependable shipping has solidified their status in the export arena.

Plum Grove, a privately owned company in Western Australia, is another significant exporter operating under a specialized service manager model, aggregating cargoes for major clients like Salim Group in Indonesia, US-based Mitsui, and Seaboard (a global agribusiness company). These collaborations give Plum Grove access to considerable Australian wheat demand in vital export markets, with its operations spanning various grain-exporting states.

Australian Grain Export is also a key industry player, known for its direct links to farmers and commitment to shipping grain worldwide. Emphasizing quality and service, they have garnered a reputation as a dependable Australian wheat supplier, connecting local supply with global market demands.

Beyond these principal exporters, many cooperatives, multinational trading firms, and smaller independent exporters contribute to the industry. These entities often specialize in certain wheat varieties, geographic markets, or customer demographics, enhancing the diversity and dynamism of Australia's export landscape.

These top Australian wheat export companies are essential to:

Future prospects for Australian wheat exports

Looking forward, the forecast for Australian wheat exports appears optimistic. ABARES projects an increase in production to around 32 million tonnes in 2024-25, buoyed by expected favourable weather in key agricultural areas. This anticipated rise in production should lead to enhanced export volumes and a rebound in export value.

While the Australian wheat industry experienced reduced export values in the past year, it remains a vital part of both the national and global economy. The outlook for increased production in the coming year signifies a promising future, reaffirming Australia’s status as a key player in the international wheat market.

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