SYDNEY, Australia (Reuters) — Australia’s agriculture production is set to rebound as the strongest El Nino in nearly 20 years subsides, according to the country’s chief commodity forecaster.
Production of staples such as wheat, cotton and milk are all set to rise during the 2016-17 season, the Australian Bureau of Agriculture, Resource Economics and Rural Sciences said, although beef output in the world’s third-largest exporter is set to fall because of a smaller herd.
Australian farmers are expected to seed a near record amount of wheat in the next few months, ABARES said, adding to global production that is expected to remain high despite benchmark prices recently falling to a more than 5 1/2 year low.
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China purchased just over 20 million tonnes of wheat, corn, barley and sorghum last year, that is well below the 60 million tonnes purchased in 2021-22.
Increased plantings and expected weather improvement are expected to produce a crop of 24.5 million tonnes, which would be a three-year high. Australia, the world’s fourth-largest wheat exporter, produced 24.2 million tonnes in 2015-16.
“Farmers in Australia have been insulated by the fall in (the Australian) dollar, while the depreciation of South American currencies will also incentivize farmers to boost production,” said Phin Ziebell, an agribusiness economist with National Australia Bank.
Australian canola production is set to rise 11 percent to 3.27 million tonnes in 2016-17, ABARES said.
European canola demand could increase, but shipments to China could fall because of stricter standards on dockage.
Australian beef production is set to fall to a three-year low as farmers rebuild their stocks after drought forced culling that pushed the herd to a two decade low.
ABARES put beef exports at 2.16 million tonnes in 2015-16, down 10 percent from the previous year.
Sugar production is also set to benefit from the improved weather. ABARES pegged output in the world’s third largest raw sugar exporter at 5.08 million tonnes in 2016-17, up six percent.
