Australian Wheat Could Be Next Boom?
With a mining boom about to fizzle, Australia may well rely on its grain sector to anchor the country's economic growth in the next few years.
And as with its mining sector, the Australia's grain sector may well enjoy a growth spurt still from its largest and strongest trading partner, China.
Allan Winney, CEO of Emerald, Australia's fifth-largest grain exporter, said in a report by The Australian that the country's wheat exports to China is already poised to reach 3 million tonnes in the 2011-12 international crop year, which runs from October through September.
"Farmers have actually already shipped around 2.4 million tonnes this season, which is more than a fourfold increase from 2010-11," he said.
If the trend continues, Australia may well rely on its wheat products to become one of its top 10 exports to China, he pointed out.
"We expect wheat to get to the top 10 commodities going to China in (the current crop year of) 2011-12. There hasn't been a large volume going there before now."
Buoyed by abundant rainfall, Australia made a 29.5 million tonnes wheat record harvest in its crop year ended March 2012. In monetary values, that translates to $800 million earnings from shipments to China this season alone, according to Mr Winney.
Local farmers may be able to repeat the winning stand in the 2012-13 crop year as the world's second-largest economy scour for options in the face of low supplies of U.S. corn
And with local wheat prices up 25 per cent since May, spurred by fears about the Northern Hemisphere harvest, Mr Winney said farmers may even be able to repeat that feat again in the 2012-13 crop year as China scours to make up for low supplies of U.S. corn as well as a shortfall of world food supplies.
Along with China's rapid urbanisation is a growing middle class with a likewise expanding taste for the good life and good food. To aid its thriving livestock industries, China has turned to Australia to help feed its grain demand.