Three-quarter-time update on 2017-18 exports

Dim Ariyasinghe, COFCO, June 5, 2018

EXPORTS have picked up in the current quarter after a muted start to the year.

While barley showed early strength on a proportional basis, exports have since been pegged back to ensure wheat is not threatened as the export leader.

Going into June, canola exports have all but finished, as European crushers have now begun sourcing new-crop seed from the northern hemisphere.

Meanwhile, sorghum exports have been scarce, with less than 100,000 tonnes hitting the Australian stem to date.

Western Australian exports continue to make up the bulk of shipments, with at least 1.2 million tonnes (Mt) of cereals shipped per month since March.

May was a particularly strong month, with more than 860,000t on the stem for wheat alone in WA.

Oat and lupin shipments have also featured on the WA shipping line-up, with around 50,000t combined being shipped per month from WA ports.

South Australian shipments have slipped slightly from April.

Interestingly enough, barley continues to dominate the SA stem, with more than 250,000t shipped in both May and June.

Port Lincoln has so far shipped around 1.4Mt, a testament to the Eyre Peninsula’s salvaged production prospects from last season.

Exports out of Victoria continue to lag just behind their year-to-date average on the stem of 2.4Mt at 2.1Mt so far.

Compared with other states, barley is over-weighted in Victoria, comprising over 850,000t of the state’s exports to date.

Volumes as a whole for the state have been on the decline since April, its peak month.

New South Wales and Queensland bulk exports remain few and far between, a function of the depressed 2017 crop, as well as insatiable feed demand up and down the east coast.

The slow exports are not just a function of the poor winter crop, with the sorghum program underperforming so far.

It is early in the cropping season, with planting still left to be done, but one cannot help draw parallels between this year’s crop potential and last year, where a modestly good year for WA, SA and Victoria helped counter the poor east-coast crop.

While WA and SA benefited from a recent bout of rain, the same cannot be said for Queensland and NSW.

Early planting reports have been less than favourable, and while yield potential is largely decided through Q3, the Bureau of Meteorology’s latest long-range outlooks are less than favourable for the east coast.

All of this combined implies, but does not guarantee, another below average export year on the horizon for NSW.

This week’s COFCO International Weekly Market Report is from Melbourne-based COFCO research analyst, Dim Ariyasinghe.


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