AS WE head into April, we are now just past the halfway mark in the 2017-18 (Oct-Sep) grains export year.  Following the sub-par crop output of 2017, grain exports have, not surprisingly, lagged from average. But there have been a few surprises.

For a start, West Australian exports have maintained export pace closer to average, no doubt a function of their late salvaged crop.  Official Australian Bureau of Statistics (ABS) export numbers to January have wheat exports at 1.7 million tonnes (Mt), with another 1.5Mt pencilled in for bulk wheat exports up to April.

While these numbers do indeed trend lower to average, barley exports for WA, and nationally, have more than made up for this shortfall.  The ABS does not disclose port-of-loading statistics for barley, but 2.3Mt of barley exports have been reported on bulk-handlers’ October-to-April shipping schedules.  Last year’s record crop was the only year that surpassed the barley export pace of WA so far.

Also, while not outperforming barley on a relative basis, canola exports for the state are at around 1.3Mt, slightly higher than the five-year average volume up to April of 1.2Mt.

Similarly, South Australia’s export performance has also performed close to average.  ABS numbers up to January reveal 1.15Mt wheat exports for the state, in line with the five-year average of 1.16Mt.  Numbers for barley are similarly robust, with close to 900,000t on vessel line-ups from October to April, well below the 2016-17 record volume of 1.5Mt.  ABS numbers confirm there were no canola vessels loaded prior to January,  but 260,000t has been reported on shipping schedules since, most of it loading at Port Adelaide’s Outer Harbor facility.

Official numbers for Victorian exports shows wheat volumes up till January at 960,000t surpassing 2016-17’s volume of 780k,000t, but this pace appears to have slowed.  Vessel line-ups for the remainder of 2018 show a decrease in volume, with 220,000t booked until April, compared with  590,000t over the same 2016-17 period.  Barley again appears to have performed robustly, with 650,000t on the shipping schedule up to now, with April so far the strongest month with 150,000t booked for export.

However, export momentum drops off for New South Wales and Queensland.  The depressed crop, coupled with the ever-present requirements of the east-coast domestic consumer, has so far suppressed grain exports.  Official numbers to January show just over 100,000t of wheat exported, with much of that assumed to be old-crop sales.  This is roughly 500,000t below average, and unofficial shipping schedules from January onwards do not show any marked improvement.  The situation is no better for barley or canola, and it is too early to gauge any summer-crop export activity.

Combined, the view remains that Australian grain and oilseed exports will not be as restricted as originally assumed after last year’s disappointing harvest.  Nevertheless, unless something changes, the lion’s share of the task will continue to be allocated to WA and SA.

Source: This week’s market report comes from COFCO research analyst, Dim Ariyasinghe.