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Grains and oilseeds world market is under pressure

Several regions in Australia, including Queensland, New South Wales and Victoria area, have been suffering from floods for weeks. The three regions mentionned alone contribute for 42% of national wheat production and 75% of national rapeseed production...

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Even if the wheat production will likely be around 24 million tonnes, against 23 million last year, the issue here is the quality of the crop. Indeed, Australia is a major player on the international scene with about 15 million tonnes exported annually. But rains have seriously affected the quality of cereals.

In an already stressed international market, the prices of milling wheat in 2011 could reach the highest ones of 2008, nearly 300 € / T

At current export rates, France could run out of provisions at the end of April 2011. This will add more stress in may and june, as one will have to wait for next harvest.

Australia is the world second largest rapeseed exporter with 1.5 million tonnes exported for an estimated production 2.5 million tons - last month figures - . To cope with the drought of last summer in Russia, European operators were expecting importation of 700,000 tons of australian rapeseed. Given the current rains concentrated on the main production area of the country, it is likely that only 50% of the expected 700 000 tonnes will be available!

So, in early 2011, we are moving to a sustained rise of agricultural raw materials prices, a rise also fueled by a strong chinese demand and fears of looming drought on Argentina, due to climate change effect known as "La Nina".

Agritel , Next Finance January 2011

Article also available in : English EN | français FR



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