Required Report - public distribution

**Date:** 9/21/2004

**GAIN Report Number:** AS4030

AS4030

**Australia**

**Grain and Feed**

**Grain Update - October**

**2004**

**Approved by:**

![](media/image1.wmf)Andrew C. Burst, Agricultural Counselor

U.S. Embassy

**Prepared by:**

Andrew C. Burst

**Report Highlights:**

Post forecasts Australia's 2004/05 wheat crop at 22.9 MMT, three percent
below the previous forecast, while barley production in 2004/05 is
forecast at 7.3 MMT, unchanged. Recent weather conditions have been
largely favorable for winter grain. Although crops are currently in
mostly good condition, a continuation of normal weather will be required
for further crop development.

Includes PSD Changes: Yes

Includes Trade Matrix: No

Unscheduled Report

Canberra \[AS1\]

\[AS\]

# 

# WINTER GRAINS

Post forecasts Australia's 2004/05 wheat production at 22.9 MMT, three
percent lower than the previous forecast of 23.5 MMT (see GAIN Report
#AS4011, 03/19/04). Lower forecast wheat output is attributed to a
downward revision in estimated area, from 12.4 million hectares to 12.05
million hectares. No change has been made in the forecast national
average wheat yield of 1.90 MT/hectare. The lower estimated wheat area
reflects recently revised estimates published by the Australian Bureau
of Agricultural and Resource Economics (ABARE).

Post forecasts 2004/05 barley production at 7.3 MMT, unchanged from the
previous forecast (GAIN Report #AS4011).

Recent weather conditions have been largely favorable for winter grain.
Favorable, well-timed rains in August and early September benefited
grain crops in many of the chronically dry areas of eastern Australia
and in major growing areas of South and Western Australia. Unfavorable
weather conditions in Queensland are expected to lead to a poor winter
grain harvest in this relatively minor producing state.

A relatively good wheat crop is expected in Western Australia, although
dry conditions at planting and recent frosts are expected to reduce
production to a level well under last season's record.

Although winter grain crops are currently in mostly good condition, a
continuation of normal weather will be required for further crop
development as warmer seasonal conditions commence. Grain crops are very
susceptible to sharp yield reductions if dry weather, hot temperatures,
and/or winds occur during the months of September and October and into
the harvest period, which normally commences in earnest in November.
This is particularly true this year as subsoil moisture is limited in
many of the major wheat producing regions.

ABARE, in their September 7, 2004, Australian Crop Report, forecast the
2004/05 national wheat crop at 22.252 MMT and the barley crop at 7.29
MMT, both of which were below their previous forecasts. These
adjustments were mostly attributed to lower estimated area, with only
slight downward adjustments made in forecasted yields. In the September
Report, ABARE estimated wheat area at 12.03 million hectares and barley
area at 3.572 million hectares.

GrainCorp Ltd., the major bulk grain handler on Australia's east coast,
is expecting a large winter grain harvest in their areas of operation in
New South Wales, Queensland and Victoria. In an August 26 press release,
GrainCorp forecast receivals of winter grain (wheat, barley, canola,
lupins) in 2004/05 at 13 MMT, higher than the 11.8 MMT received in
2003/04, which also included summer-grown crops (sorghum, rice and other
miscellaneous crops).

Wheat export figures from the Wheat Export Authority (WEA) show
Australia's July-June 2003/04 wheat exports totaling 14.6 MMT, based on
unpublished Australian Bureau of Statistics data, up sharply from the
10.6 MMT exported in July-June 2002/03. The quantities shipped during
July-June 2002/03 and 2003/04 to major export destinations are presented
in the table at the end of this report.

Based on data for the first nine months (Oct-June) of marketing year
(MY) 2003/04 (Oct-Sep), Australia's wheat exports totaled 12.7 MMT,
versus only 7.0 MMT during the comparable nine-month period in MY
2002/03.

Post's forecast of Australia's total wheat exports is 17.2 MMT in MY
2004/05 and 16.46 MMT in 2003/04, unchanged from previous forecasts.

According to trade reports, Australia has made some recent sales of
wheat to Iraq and Pakistan. Reportedly, Pakistan awarded 300,000 MT of
wheat to Australia during a recent tender that totaled 442,000 MT.
Shipments are to be made between the first week of October and the
middle of December 2004. This would be the first exports of Australian
wheat to Pakistan in a number of years. A sale of wheat to Pakistan
earlier this year was rejected by Pakistan due to alleged quality
concerns. The trade is also reporting that Australia was recently
awarded 800,000 MT of wheat for Iraq. Neither of these reports has yet
been confirmed by AWB.

# SUMMER GRAINS

Post forecasts the major summer-grown grain crops of rice and grain
sorghum at 700,000 MT (rough basis) and 2.2 MMT, respectively, in
2005/06. This rice forecast is substantially lower than the previous
forecast, while the sorghum forecast is unchanged (GAIN Report #AS4011).
The actual outcome of these harvests is critically dependent on
near-term rainfall patterns and the status of irrigation water supplies
at planting. Rice is normally planted beginning in November, while
sorghum planting normally commences in October and extends into the
first part of the year.

The 2005/06 rice production forecast reflects a harvest well under the
longer-term average level, but up somewhat from the sharply reduced
harvests in 2003/04 and 2004/05. In 2002/03, Australia harvested 1.25
MMT of rough rice, or nearly double the forecast for 2005/06.

Post has also revised the 2004/05 sorghum production estimate downward
to 1.9 MMT, which is roughly in-line with the most recent ABARE
estimate. (The harvest of this crop was finished earlier this calendar
year.)

ABARE's September Crop Report forecasts the 2005/06 rough rice crop at
550,000 MT and the 2005/06 grain sorghum crop at 2.05 MMT.

**WHEAT EXPORTS BY MAJOR DESTINATIONS,**

**2002/03 & 2003/04 (July-June), TMT**

+-------------------------------------+------------------+-------------+
| **COUNTRY**                         | ## 2002/03       | ## 2003/04  |
+-------------------------------------+------------------+-------------+
| Egypt                               | 602              | 2,534       |
+-------------------------------------+------------------+-------------+
| Indonesia                           | 1,578            | 2,494       |
+-------------------------------------+------------------+-------------+
| Japan                               | 1,123            | 1,236       |
+-------------------------------------+------------------+-------------+
| Iraq                                | 1,037            | 1,109       |
+-------------------------------------+------------------+-------------+
| Korea, Rep.                         | 1,013            | 1,064       |
+-------------------------------------+------------------+-------------+
| China                               | 38               | 746         |
+-------------------------------------+------------------+-------------+
| Malaysia                            | 369              | 703         |
+-------------------------------------+------------------+-------------+
| Sudan                               | 333              | 676         |
+-------------------------------------+------------------+-------------+
| Thailand                            | 284              | 408         |
+-------------------------------------+------------------+-------------+
| Vietnam                             | 253              | 337         |
+-------------------------------------+------------------+-------------+
| Italy                               | 168              | 325         |
+-------------------------------------+------------------+-------------+
| Turkey                              | 50               | 308         |
+-------------------------------------+------------------+-------------+
| New Zealand                         | 296              | 291         |
+-------------------------------------+------------------+-------------+
| Kuwait                              | 175              | 259         |
+-------------------------------------+------------------+-------------+
| South Africa                        | 48               | 247         |
+-------------------------------------+------------------+-------------+
| Iran                                | 1,064            | 0           |
+-------------------------------------+------------------+-------------+
| Others                              | 2,166            | 1,906       |
+-------------------------------------+------------------+-------------+
| **Total**                           | **10,597**       | **14,643**  |
+-------------------------------------+------------------+-------------+
| of which in bulk                    | 10,468           | 14,415      |
+-------------------------------------+------------------+-------------+
| of which in bags                    | 8                | 11          |
+-------------------------------------+------------------+-------------+
| of which in containers              | 120              | 217         |
+-------------------------------------+------------------+-------------+

Source: WEA from unpublished Australian Bureau of Statistics

trade data. Totals may not add due to rounding.

+-------------------+-----+------+-----+------+-----+------+------+
| PSD Table         |     |      |     |      |     |      |      |
|                   |     |      |     |      |     |      |      |
| Wheat             |     |      |     |      |     |      |      |
+-------------------+-----+------+-----+------+-----+------+------+
|                   | **  | **R  | **  | **Es | **  | **Fo | *    |
|                   | 200 | evis | 200 | tima | 200 | reca | UOM* |
|                   | 2** | ed** | 3** | te** | 4** | st** |      |
+-------------------+-----+------+-----+------+-----+------+------+
|                   | **U | **   | **U | **   | **U | **   |      |
|                   | SDA | Post | SDA | Post | SDA | Post |      |
|                   | Of  | Esti | Of  | Esti | Of  | Esti |      |
|                   | fic | mate | fic | mate | fic | mate |      |
|                   | ial | \    | ial | \    | ial | \    |      |
|                   | \[O | [New | \[O | [New | \[O | [New |      |
|                   | ld\ | \]** | ld\ | \]** | ld\ | \]** |      |
|                   | ]** |      | ]** |      | ]** |      |      |
+-------------------+-----+------+-----+------+-----+------+------+
| **Market Year     |     | **1  |     | **1  |     | **1  | *    |
| Begin**           |     | 0/20 |     | 0/20 |     | 0/20 | MM/Y |
|                   |     | 02** |     | 03** |     | 04** | YYY* |
+-------------------+-----+------+-----+------+-----+------+------+
| **Area            | 11  | 1    | 12  | 1    | 12  | 1    | *(   |
| Harvested**       | 045 | 1045 | 401 | 2400 | 500 | 2050 | 1000 |
|                   |     |      |     |      |     |      | HA)* |
+-------------------+-----+------+-----+------+-----+------+------+
| **Beginning       | 8   | 6803 | 3   | 1661 | 4   | 3661 | *(   |
| Stocks**          | 048 |      | 142 |      | 937 |      | 1000 |
|                   |     |      |     |      |     |      | MT)* |
+-------------------+-----+------+-----+------+-----+------+------+
| **Production**    | 10  | 1    | 24  | 2    | 23  | 2    | *(   |
|                   | 132 | 0059 | 920 | 5000 | 500 | 2900 | 1000 |
|                   |     |      |     |      |     |      | MT)* |
+-------------------+-----+------+-----+------+-----+------+------+
| **TOTAL Mkt. Yr.  | 286 | 299  | 75  | 0    | 75  | 0    | *(   |
| Imports**         |     |      |     |      |     |      | 1000 |
|                   |     |      |     |      |     |      | MT)* |
+-------------------+-----+------+-----+------+-----+------+------+
| **Jul-Jun         | 284 | 299  | 75  | 0    | 75  | 0    | *(   |
| Imports**         |     |      |     |      |     |      | 1000 |
|                   |     |      |     |      |     |      | MT)* |
+-------------------+-----+------+-----+------+-----+------+------+
| **Jul-Jun Import  | 0   | 0    | 0   | 0    | 0   | 0    | *(   |
| U.S.**            |     |      |     |      |     |      | 1000 |
|                   |     |      |     |      |     |      | MT)* |
+-------------------+-----+------+-----+------+-----+------+------+
| **TOTAL SUPPLY**  | 18  | 1    | 28  | 2    | 28  | 2    | *(   |
|                   | 466 | 7161 | 137 | 6661 | 512 | 6561 | 1000 |
|                   |     |      |     |      |     |      | MT)* |
+-------------------+-----+------+-----+------+-----+------+------+
| **TOTAL Mkt. Yr.  | 9   | 9100 | 17  | 1    | 17  | 1    | *(   |
| Exports**         | 146 |      | 500 | 7200 | 000 | 6461 | 1000 |
|                   |     |      |     |      |     |      | MT)* |
+-------------------+-----+------+-----+------+-----+------+------+
| **Jul-Jun         | 10  | 1    | 15  | 1    | 17  | 1    | *(   |
| Exports**         | 946 | 0597 | 096 | 4643 | 000 | 6700 | 1000 |
|                   |     |      |     |      |     |      | MT)* |
+-------------------+-----+------+-----+------+-----+------+------+
| **Feed Dom.       | 3   | 3600 | 3   | 3000 | 2   | 2900 | *(   |
| Consumption**     | 453 |      | 000 |      | 900 |      | 1000 |
|                   |     |      |     |      |     |      | MT)* |
+-------------------+-----+------+-----+------+-----+------+------+
| **TOTAL Dom.      | 6   | 6400 | 5   | 5800 | 5   | 5700 | *(   |
| Consumption**     | 178 |      | 700 |      | 600 |      | 1000 |
|                   |     |      |     |      |     |      | MT)* |
+-------------------+-----+------+-----+------+-----+------+------+
| **Ending Stocks** | 3   | 1661 | 4   | 3661 | 5   | 4400 | *(   |
|                   | 142 |      | 937 |      | 912 |      | 1000 |
|                   |     |      |     |      |     |      | MT)* |
+-------------------+-----+------+-----+------+-----+------+------+
| **TOTAL           | 18  | 1    | 28  | 2    | 28  | 2    | *(   |
| DISTRIBUTION**    | 466 | 7161 | 137 | 6661 | 512 | 6561 | 1000 |
|                   |     |      |     |      |     |      | MT)* |
+-------------------+-----+------+-----+------+-----+------+------+

+--------------------+-----+------+-----+------+-----+------+------+
| PSD Table          |     |      |     |      |     |      |      |
|                    |     |      |     |      |     |      |      |
| Rice, Milled       |     |      |     |      |     |      |      |
+--------------------+-----+------+-----+------+-----+------+------+
|                    | **  | **R  | **  | **Es | **  | **Fo | *    |
|                    | 200 | evis | 200 | tima | 200 | reca | UOM* |
|                    | 2** | ed** | 3** | te** | 4** | st** |      |
+--------------------+-----+------+-----+------+-----+------+------+
|                    | **U | **   | **U | **   | **U | **   |      |
|                    | SDA | Post | SDA | Post | SDA | Post |      |
|                    | Of  | Esti | Of  | Esti | Of  | Esti |      |
|                    | fic | mate | fic | mate | fic | mate |      |
|                    | ial | \    | ial | \    | ial | \    |      |
|                    | \[O | [New | \[O | [New | \[O | [New |      |
|                    | ld\ | \]** | ld\ | \]** | ld\ | \]** |      |
|                    | ]** |      | ]** |      | ]** |      |      |
+--------------------+-----+------+-----+------+-----+------+------+
| **Market Year      |     | **0  |     | **0  |     | **0  | *    |
| Begin**            |     | 3/20 |     | 3/20 |     | 3/20 | MM/Y |
|                    |     | 03** |     | 04** |     | 05** | YYY* |
+--------------------+-----+------+-----+------+-----+------+------+
| **Area Harvested** | 38  | 38   | 65  | 65   | 65  | 75   | *(   |
|                    |     |      |     |      |     |      | 1000 |
|                    |     |      |     |      |     |      | HA)* |
+--------------------+-----+------+-----+------+-----+------+------+
| **Beginning        | 766 | 720  | 604 | 479  | 347 | 272  | *(   |
| Stocks**           |     |      |     |      |     |      | 1000 |
|                    |     |      |     |      |     |      | MT)* |
+--------------------+-----+------+-----+------+-----+------+------+
| **Milled           | 280 | 279  | 383 | 393  | 400 | 501  | *(   |
| Production**       |     |      |     |      |     |      | 1000 |
|                    |     |      |     |      |     |      | MT)* |
+--------------------+-----+------+-----+------+-----+------+------+
| **Rough            | 392 | 390  | 536 | 550  | 559 | 701  | *(   |
| Production**       |     |      |     |      |     |      | 1000 |
|                    |     |      |     |      |     |      | MT)* |
+--------------------+-----+------+-----+------+-----+------+------+
| **MILLING RATE     | 7   | 7150 | 7   | 7150 | 7   | 7150 | *(   |
| (.9999)**          | 150 |      | 150 |      | 150 |      | 1000 |
|                    |     |      |     |      |     |      | MT)* |
+--------------------+-----+------+-----+------+-----+------+------+
| **TOTAL Imports**  | 88  | 70   | 65  | 70   | 65  | 70   | *(   |
|                    |     |      |     |      |     |      | 1000 |
|                    |     |      |     |      |     |      | MT)* |
+--------------------+-----+------+-----+------+-----+------+------+
| **Jan-Dec          | 94  | 70   | 60  | 70   | 60  | 70   | *(   |
| Imports**          |     |      |     |      |     |      | 1000 |
|                    |     |      |     |      |     |      | MT)* |
+--------------------+-----+------+-----+------+-----+------+------+
| **Jan-Dec Import   | 2   | 0    | 0   | 0    | 0   | 0    | *(   |
| U.S.**             |     |      |     |      |     |      | 1000 |
|                    |     |      |     |      |     |      | MT)* |
+--------------------+-----+------+-----+------+-----+------+------+
| **TOTAL SUPPLY**   | 1   | 1069 | 1   | 942  | 812 | 843  | *(   |
|                    | 134 |      | 052 |      |     |      | 1000 |
|                    |     |      |     |      |     |      | MT)* |
+--------------------+-----+------+-----+------+-----+------+------+
| **TOTAL Exports**  | 150 | 210  | 325 | 290  | 350 | 300  | *(   |
|                    |     |      |     |      |     |      | 1000 |
|                    |     |      |     |      |     |      | MT)* |
+--------------------+-----+------+-----+------+-----+------+------+
| **Jan-Dec          | 141 | 150  | 300 | 260  | 350 | 290  | *(   |
| Exports**          |     |      |     |      |     |      | 1000 |
|                    |     |      |     |      |     |      | MT)* |
+--------------------+-----+------+-----+------+-----+------+------+
| **TOTAL Dom.       | 380 | 380  | 380 | 380  | 380 | 380  | *(   |
| Consumption**      |     |      |     |      |     |      | 1000 |
|                    |     |      |     |      |     |      | MT)* |
+--------------------+-----+------+-----+------+-----+------+------+
| **Ending Stocks**  | 604 | 479  | 347 | 272  | 82  | 163  | *(   |
|                    |     |      |     |      |     |      | 1000 |
|                    |     |      |     |      |     |      | MT)* |
+--------------------+-----+------+-----+------+-----+------+------+
| **TOTAL            | 1   | 1069 | 1   | 942  | 812 | 843  | *(   |
| DISTRIBUTION**     | 134 |      | 052 |      |     |      | 1000 |
|                    |     |      |     |      |     |      | MT)* |
+--------------------+-----+------+-----+------+-----+------+------+

+--------------------+-----+------+-----+------+-----+------+------+
| PSD Table          |     |      |     |      |     |      |      |
|                    |     |      |     |      |     |      |      |
| Sorghum            |     |      |     |      |     |      |      |
+--------------------+-----+------+-----+------+-----+------+------+
|                    | **  | **R  | **  | **Es | **  | **Fo | *    |
|                    | 200 | evis | 200 | tima | 200 | reca | UOM* |
|                    | 2** | ed** | 3** | te** | 4** | st** |      |
+--------------------+-----+------+-----+------+-----+------+------+
|                    | **U | **   | **U | **   | **U | **   |      |
|                    | SDA | Post | SDA | Post | SDA | Post |      |
|                    | Of  | Esti | Of  | Esti | Of  | Esti |      |
|                    | fic | mate | fic | mate | fic | mate |      |
|                    | ial | \    | ial | \    | ial | \    |      |
|                    | \[O | [New | \[O | [New | \[O | [New |      |
|                    | ld\ | \]** | ld\ | \]** | ld\ | \]** |      |
|                    | ]** |      | ]** |      | ]** |      |      |
+--------------------+-----+------+-----+------+-----+------+------+
| **Market Year      |     | **0  |     | **0  |     | **0  | *    |
| Begin**            |     | 3/20 |     | 3/20 |     | 3/20 | MM/Y |
|                    |     | 03** |     | 04** |     | 05** | YYY* |
+--------------------+-----+------+-----+------+-----+------+------+
| **Area Harvested** | 673 | 673  | 625 | 570  | 700 | 797  | *(   |
|                    |     |      |     |      |     |      | 1000 |
|                    |     |      |     |      |     |      | HA)* |
+--------------------+-----+------+-----+------+-----+------+------+
| **Beginning        | 69  | 92   | 54  | 67   | 49  | 100  | *(   |
| Stocks**           |     |      |     |      |     |      | 1000 |
|                    |     |      |     |      |     |      | MT)* |
+--------------------+-----+------+-----+------+-----+------+------+
| **Production**     | 1   | 1541 | 1   | 1850 | 1   | 2231 | *(   |
|                    | 465 |      | 850 |      | 900 |      | 1000 |
|                    |     |      |     |      |     |      | MT)* |
+--------------------+-----+------+-----+------+-----+------+------+
| **TOTAL Mkt. Yr.   | 0   | 0    | 0   | 0    | 0   | 0    | *(   |
| Imports**          |     |      |     |      |     |      | 1000 |
|                    |     |      |     |      |     |      | MT)* |
+--------------------+-----+------+-----+------+-----+------+------+
| **Oct-Sep          | 0   | 0    | 0   | 0    | 0   | 0    | *(   |
| Imports**          |     |      |     |      |     |      | 1000 |
|                    |     |      |     |      |     |      | MT)* |
+--------------------+-----+------+-----+------+-----+------+------+
| **Oct-Sep Import   | 0   | 0    | 0   | 0    | 0   | 0    | *(   |
| U.S.**             |     |      |     |      |     |      | 1000 |
|                    |     |      |     |      |     |      | MT)* |
+--------------------+-----+------+-----+------+-----+------+------+
| **TOTAL SUPPLY**   | 1   | 1633 | 1   | 1917 | 1   | 2331 | *(   |
|                    | 534 |      | 904 |      | 949 |      | 1000 |
|                    |     |      |     |      |     |      | MT)* |
+--------------------+-----+------+-----+------+-----+------+------+
| **TOTAL Mkt. Yr.   | 75  | 87   | 400 | 417  | 350 | 500  | *(   |
| Exports**          |     |      |     |      |     |      | 1000 |
|                    |     |      |     |      |     |      | MT)* |
+--------------------+-----+------+-----+------+-----+------+------+
| **Oct-Sep          | 75  | 50   | 300 | 400  | 500 | 530  | *(   |
| Exports**          |     |      |     |      |     |      | 1000 |
|                    |     |      |     |      |     |      | MT)* |
+--------------------+-----+------+-----+------+-----+------+------+
| **Feed Dom.        | 1   | 1475 | 1   | 1396 | 1   | 1696 | *(   |
| Consumption**      | 400 |      | 450 |      | 500 |      | 1000 |
|                    |     |      |     |      |     |      | MT)* |
+--------------------+-----+------+-----+------+-----+------+------+
| **TOTAL Dom.       | 1   | 1479 | 1   | 1400 | 1   | 1700 | *(   |
| Consumption**      | 405 |      | 455 |      | 505 |      | 1000 |
|                    |     |      |     |      |     |      | MT)* |
+--------------------+-----+------+-----+------+-----+------+------+
| **Ending Stocks**  | 54  | 67   | 49  | 100  | 94  | 131  | *(   |
|                    |     |      |     |      |     |      | 1000 |
|                    |     |      |     |      |     |      | MT)* |
+--------------------+-----+------+-----+------+-----+------+------+
| **TOTAL            | 1   | 1633 | 1   | 1917 | 1   | 2331 | *(   |
| DISTRIBUTION**     | 534 |      | 904 |      | 949 |      | 1000 |
|                    |     |      |     |      |     |      | MT)* |
+--------------------+-----+------+-----+------+-----+------+------+