El Niño Threat on Australia’s Wheat Production

As reported by S&P Global, in their forecast for the 2023–24 marketing year (October–September), the Australian Bureau of Agricultural and Resource Economics, or ABARES, predicted that the nation’s wheat production would fall by 33.9% on an annual basis to 26.2 million mt. This is in light of the dangers of the El Nino weather phenomena developing this year in the equatorial Pacific Ocean.

Australia is the world’s second-largest wheat exporter, delivering mostly to customers in Asia, such as China, Indonesia, and Japan.

As per the Department of Agriculture, Fisheries, and Forestry’s June crop report, total Australian winter crop production is expected to decline by 34% to 44.9 million tonnes in 2023–24, or about 3% less than the 10-year average of 46.4 million tonnes to 2022–23.

The likelihood of an El Nio in 2023 has been predicted by the Australian Bureau of Meteorology at 70%.

Due to widespread dryness and little rainfall caused by this meteorological event, Australia’s crops suffer.

The expected decrease in production will probably have an impact on Australian wheat shipments as well. In its Agricultural Commodities report, ABARES predicted that Australia would export about 21 million mt of wheat in MY 2023–2024, down 29% from the previous year.

Winter crop plantings will decrease but still reach a record-high 23.3 million hectares, with wheat and canola plantings declining by 2% and 11%, respectively. Because it can withstand dry weather better, plantings of barley are expected to increase by 4% to 4.3 million hectares.

According to the June agricultural commodities report, lower yields will put pressure on the total value of agricultural production, which is predicted to decline by 14% to A$79 billion ($52 billion) in 2023–24, still the third largest on record, due to lower yields.

Due to decreasing production and declining grain and oilseed prices globally, agricultural exports are also anticipated to decline from record highs, falling 17% to A$65 billion in 2023–2024.

Due to decreasing production and declining grain and oilseed prices globally, agricultural exports are also anticipated to decline from record highs, falling 17% to A$65 billion in 2023–2024.