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Argentina’s grain exports challenge Australia’s competitiveness

by Grain Central, 16 November 2018

ARGENTINA’s wheat exports are set to double over the next decade, potentially challenging Australia’s competitiveness in key markets, according to a new report from the Australian Export Grains Innovation Centre (AEGIC).

AEGIC chief economist Professor Ross Kingwell said Argentina was already a world powerhouse of grain exports with wheat poised to take a greater role.

“Argentina accounts for 15 per cent of the global grain trade, exporting 86 million tonnes (Mt),” he said.

“While corn and soybean are still their main grains,  wheat will become increasingly important for Argentina.”

Prof Kingwell said Argentina was increasing its wheat yields at a faster rate than Australia, and this trend would continue as more farmers used increased inputs, adopted superior varieties and used improved technologies.

“Argentinian wheat production is projected to easily hit 21Mt over the next decade,” he said. “In addition, the area planted to wheat could increase by a further 2 million hectares. This means there will be around 14-15Mt of wheat regularly available for export, more than double the current average of about 6.5Mt.”

Prof Kingwell said this should be a cause for concern for Australia.

“Australian wheat exporters will face increased competition in key markets from Argentinian wheat,” he said.

“As its exports grow, Argentina is also likely to commit more organisational resources into market development.

“Argentina’s wheat production is a smaller threat than that of Russia and Ukraine. Nevertheless, the situation should still be monitored and responded to by Australia.”

Prof Kingwell said there was a need for greater intelligence to be gathered about the specific characteristics of Australian wheat that are required in key markets.

“This information helps Australian wheat breeders and those engaged in wheat variety classification and segregation to ensure Australian wheat varieties have traits that not only benefit Australian wheat growers but also serve the needs of those end users.”

Prof Kingwell said AEGIC’s economic and supply chain research helped the Australian industry understand and prepare for future challenges. Past studies have covered Ukraine, Russia, Canada as well as detailed analysis into Australia’s grain supply chains.

Source: AEGIC

 

 

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