A historic low in the Australian dollar could provide benefits for exporters.

AS CHINA and the United States duke it out in the tariff ring, Australian exporters are riding on the benefits of a low in the Australian dollar not seen since March 2020.

That was in the midst of the COVID pandemic, when the AUD fell to 0.55 US cents, its lowest since 2003, and eastern Australia was at the tail end of a drought which started in 2017.

The drought produced a grain deficit for New South Wales and Queensland, filled largely by grain shipped from South Australia and Western Australia, meaning it had no export surplus, and WA’s main customer was eastern Australia.

This time around, the low dollar has come at a time when NSW and Qld have bulk sorghum available, and Victoria joins them in having wheat available.

While the worst drought in living memory means SA has precious little current-crop barley and wheat left unsold, WA harvested its third-biggest winter crop on record in 2024-25.

The weaker dollar means exporters in eastern states and WA had a window of opportunity to sock away some cargoes before the dollar bounced to 61c in overnight trading.

The correction in many currencies and sharemarket indicators is the result of US President Donald Trump announcing a 90-day pause on tariffs to a list of countries.

That list does not include China, whose exports are now subject to a 125-percent tariff in the US, while China has pushed back with tariffs on the US now at 84pc.

Sorghum on list

China has been the volume buyer of Australian sorghum for more than 10 years, and Australia’s sorghum exports were already near their annual peak when Trump, on April 3, announced sweeping tariffs on just about every country in the world.

The US, followed by Australia, is typically the world’s biggest sorghum exporter, with China the shared major market.

Some US farmer groups have already expressed concern about Trump’s tariff, although a statement from the Texas-based National Sorghum Producers is yet to be seen.

The US sorghum shipping year starts in September, and USDA data indicates the US exported 41.8 million bushels, or 1.06 million tonnes (Mt) to China between September and January, the first five months of its shipping year.

“For reference, this is less than half of US sorghum destined for China over the same period a year ago,” USDA’s March 2025 Feed Outlook states.

From October to February, Australia exported around 338,000t to China, with at least 100,000t likely to be shipped from March to August to wind up the peak Qld shipment period.

If the bilateral US and China tariffs stay where they are, Australia could rival the US as the major supplier of sorghum to China for what is believed to be the first time ever.

The drop in currency has seen delivered Newcastle and Brisbane sorghum prices hit A$400/t, and growers have been keen sellers at those levels.

On shipping stems in Qld, sorghum is already the major for coming months.

Values climb on Clear

Clear Grain Exchange (CGX) is a trading platform for warehoused and on-farm grain, and it saw buying interest grow early in the week in response to the low dollar.

“Buyers pushed grain prices higher to begin the week with strong demand for all grades and locations,” CGX east coast manager Linden Stevens said on Tuesday.

“On average, the traded prices for grain improved $5-20/t across the country for all grades and commodities.”

Mr Stevens said the 3c drop in the Aussie against the US dollar was the catalyst.

“A weaker Australian dollar helps to make Australian grain exports more competitive and this flows through to see a lift in Australian grain prices.”

“Aussie grain is in demand and we’re seeing all buyers increase their bids to match sell prices set by growers and in most locations grain is selling at values stronger than best published bids indicate.

“The amount of grain to be exported and consumed domestically has not been bought yet which means all buyers — domestic and offshore — will need to secure tonnage for their needs.

“For growers holding grain this season, it’s likely a good time to ask for prices they’re targeting by offering it for sale to all buyers.

“Before the fall in the Australian dollar buyers were taken a relatively cautious approach buying grain focussed on purchasing nearby requirements.

“This changed at the start of the week as Australian grain became more competitive globally and saw both domestic buyers and exporters look to cover requirements further into the future.”

Canola, barley well sold

As stated in the latest Australian Bureau of Statistics barley export data, Flexi Grain pool manager Sam Roache said Australia was heading for a “a very tight ending-stocks scenario”, and strong demand has been bolstered by news of China’s tariffs on US sorghum as China’s feed sector looks for a replacement.

Ongoing dry conditions in South Australia and western Victoria also have growers with feed barley on hand or warehoused eyeing the local drought-feed market.

“The continuing poor weather across South Australia and Victoria are leaving the market wondering where to go next as Western Australia runs out of bullets,” Mr Roache said.

Indicative prices for GM and non-GM canola in eastern and Western Australia have rallied this week, but the trade believes the volume left to price is minimal.

Woodside Commodities general manager Hamish Steele-Park said the dollar’s drop has not had any immediate impact on the prompt canola market after a strong early shipment program.

“The Australian canola export program is very robust to date and there is little left to export out of the east coast,” Mr Steele-Park said.

“Total year-to-date canola exports are at over 2.8Mt, mostly to the EU.”

Outlined in the latest ABS canola exports, 1.9Mt has been shipped from December to February alone.

“Exports will now have to come out of Western Australia, which is the only state with surplus canola, and mostly GM.”

On cottonseed, Mr Steele-Park said China has not bought US seed for some time.

“The US will still ship seed into Korea and Japan as it is cheaper than Australian seed on a CFR basis; China will buy Australian cottonseed predominantly.”

Recent rain in Qld and northern NSW has made for a slow start to ginning, and new-crop exports of cottonseed are not expected to get going until May.

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