Australia to import first wheat in 12 years as drought bites

Ag department clears Canadian wheat for import

australia drought
File photo of idled equipment in drought conditions on a farm in New South Wales, Australia. (f.ield_of_vision/iStock/Getty Images)

Sydney | Reuters — Australia will import its first shipment of wheat in more than a decade as a drought across the country’s east coast wilts supply in the world’s fourth largest exporter of the staple grain.

Australia’s Department of Agriculture and Water Resources said late on Tuesday that it has approved an import permit of Canadian wheat.

“The shipment is expected to arrive in Australia in the next six to eight weeks,” it said in a statement on its website.

Australia last imported wheat in 2007 when an El Nino weather event led to a severe drought and cut production to around half of the typical annual output.

Although the last El Nino was in 2016, Australia has suffered a prolonged drought along its east coast in recent years, which has led to two straight years of lower output.

The drought also threatens production this year.

Farmers are now sowing crops, but with little rains, many have been forced to delay planting or choose to sow into dry soils — exposing them to crop failures.

Australia’s official commodity forecaster in March said production would rally nearly 40 per cent this year but with little rains, private forecasters are beginning to trim their estimates.

Australia’s traditional customers have already turned to the Black Sea region to secure supplies.

Indonesia, the world’s second-largest importer which relied on Australia for much of its wheat supplies, has bought record volumes from Russia and Ukraine.

The Black Sea region, Europe and North America are expected to post a rise in production for the 2019-20 crop, to be harvested around the middle of this year, likely depressing prices.

— Colin Packham is a Reuters commodities correspondent in Sydney.

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