SYDNEY, Australia (Reuters) — A bumper Australian wheat crop will help feed increased demand from China, traders said in early December after the government’s forecaster unexpectedly raised its estimate of the upcoming harvest to the third biggest on record.
Chinese demand for Australian wheat has resurfaced after a poor domestic crop, leading to forecasts that the world’s biggest wheat producer could import up to 7.5 million tonnes globally in 2013-14.
The Australian Bureau of Agriculture and Resource Economics and Sciences (ABARES) expects wheat production to be 26.2 million tonnes in 2013-14, up seven percent from its previous estimate in September, citing good rain across the country’s southwest.
The increase was driven by a 31 percent jump in the expected harvest for the largest grain producing state Western Australia, which outweighed a lower forecast in eastern states.
“We see continued demand from China and expect to see increased flow of wheat,” said Tom Puddy, head of marketing at CBH Group, the state’s largest seller of wheat.
China had bought more than two million tonnes of Australian wheat by September, an official China think-tank said, although traders estimate sales of three to four million tonnes.
Official figures are not released for Australian wheat sales to China.