Drought hits Australian crops

Australia, the world’s second-largest wheat exporter, with about 15 percent of the global wheat trade, has had to cut its crop forecast for the year by 29 percent.

The reduction, the result of serious drought conditions in parts of the nation, had been expected but is larger than anticipated and could have an effect on grain prices around the world.

While growing conditions are good in Western Australia, where the winter crop is expected to be 16 percent bigger this year than last, other parts of the country are expecting large drops in crops this year.

The Australian Bureau of Agricultural and Resource Economics (Abare) had previously forecast a wheat crop totaling 20.4 million tonnes. Now, however, it only expects a crop of 16 million tonnes.

It has also lowered its estimate of the total winter crop, with wheat it most important crop, to 26.1 million tonnes, 17 percent less than last year. New South Wales will likely be hardest hit, with a crop of around 4 million tonnes, down by 55 percent. Queensland production will also be down, by around 27 percent.

The ministry of agriculture has warned that even these estimates might be too optimistic, given the lack of rain.

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