Australian Dec-May wheat exports to Africa hit 2.1Mt

Liz Wells, July 7, 2021

South Africa imports wheat to supplement its domestic crop grown in regions including the Western Cape, and Australia has been a major source in 2021 to date. Photo: Stephan Erasmus via GrainSA

AFRICAN nations importing wheat have helped Australia shift its biggest ever wheat crop, collectively receiving 2.1 million tonnes (Mt) of Australian wheat in the six months to May 31, while Asian customers including Indonesia on 2.6Mt, Vietnam on 1.7Mt and China on 1.3Mt have, as usual, bought the majority.

Middle East destinations also featured prominently, with countries in the region receiving 1.5Mt of the 13.4Mt wheat Australia shipped in Dec-May, traditionally the biggest volume months of Australia’s shipping year which ends on September 30.

Keen, early trades

Australia’s current-crop wheat was aggressively marketed by local and global entities from around August last year, when it became evident Australia had a bin-buster on its hands, and Australian exporters were offering very cheap basis prices compared with Northern Hemisphere origins.

By October, the market was talking about the likelihood of Russia imposing a quota and tax on its wheat exports, and forward African business started to hit the books.

Shipping stems indicate cargoes were booked by some of the big names in optional-origin trading such as Bunge, Cargill, Glencore and LDC, as well as Western Australia’s CBH Group, the ASX-listed GrainCorp and Singapore-based Lemarc Agromond.

Emerald Grain, an Australian company which operates Melbourne’s only bulk grain terminal, has also shipped several cargoes.

“In the first half of this year, we were very competitive into east Africa because Black Sea prices were high, Russian tax disrupted the flow of grain, and Australia had a good-quality crop to sell,” Emerald Grain general manager David Johnson said.

Mr Johnson said in contrast to Middle East customers, primarily buyers through short-term tenders, east African buyers showed a willingness to book Australian wheat for deferred shipment.

“It’s been a nice change.”

Mr Johnson said bulk sea-freight rates, as well as the competitiveness of Black Sea wheat, could well diminish Australia’s 2021-22 exports to Africa.

“Black Sea origin is getting cheaper, and sea-freight rates are high; they’re double where they were 12 months ago, and that’s all going to have an impact.”

Supplement for regular markets

Australian wheat sales to Africa are nothing new.

In the 1990s Egypt was Australia’s biggest wheat customer before Indonesia displaced it, and other African nations occasionally buy cargoes from Australia.

Egypt remains a regular customer for Australia, but volumes are often small, as Russia, Ukraine, Romania and France are usually its major suppliers.

According to USDA’s May 2021 Grain: World Markets and Trade report, Egypt in 2020-21 was the world’s biggest wheat importer on 13Mt, followed by China on 10.5Mt and Indonesia on 10Mt.

In the six months to May 31, Australia exported 263,142t of wheat to Egypt, which made it Australia’s third-biggest African destination behind South Africa on 480,739 and Kenya on 474,394t.

By contrast, and as a function of the Australian drought which curtailed Australia’s ability to export bulk wheat, Australia exported 46,550t to Kenya, 164,241t to Egypt and nothing to South Africa in the corresponding 2019-20 period.

A September 2020 USDA Foreign Agricultural Service report said South Africa imported 1.7Mt of wheat in 2019-20 (Oct-Sep), with Poland on 542,984t and Russia on 383,751t the major suppliers.

Australia’s shipping year officially starts in October, but volume in the opening two months is limited as new-crop wheat is available only out of Queensland ports, and Geraldton as WA’s northernmost wheat-growing region.

Australia’s 2020-21 wheat crop is estimated by ABARES at 33.3Mt, and new crop is seen at 27.8Mt.

Australia’s 2020-21 export surplus is estimated by USDA at 22Mt, and 2Mt less for new crop.

Dec Jan Feb March April May TONNES
Burundi 0 0 2962 0 8279 12300 23541
Egypt 42850 71286 63004 0 86002 0 263142
Kenya 0 44000 44000 97699 70421 218274 474394
Madagascar 0 0 32307 0 0 0 32307
Malawi 0 0 10000 0 20400 37050 67450
Mozambique 0 0 56484 8000 51094 27000 142578
Nigeria 0 0 45980 0 0 41800 87780
Rwanda 0 0 5923 8734 14711 13159 42526
South Africa 0 0 46482 161400 112030 160827 480739
Sudan 0 0 9091 144385 0 72600 226076
Tanzania 0 0 30605 27888 32320 56226 147039
Uganda 0 0 0 42354 5000 58710 106064
Zambia 0 0 0 0 8000 6000 14000
TOTAL 42850 115286 346838 490460 408256 703946 2107636

Table 1: Australian bulk wheat exports to African destinations for the six months from December 1, 2020 to May 31, 2021. Source: Australian Bureau of Statistics

NOTE: While Egypt is often considered part of the Middle East, Grain Central has for the purposes of this article included it in the list of African nations.

Grain Central publishes ABS wheat export data each month, and the figures in the table are gleaned from the data to May 2021 and the data to February 2021.



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