Cropping exports 2023-24

Cropping commodity overview

• The value of Australian cropping exports decreased $8.4 billion (-27.3 per cent) in 2023-24 to a total of $22.4 billion.
• The primary driver of the decrease was the large drop in wheat export volume along with a softening of prices from the previous year.
• Export volume is expected to decline year-on-year due to below average exports in the first half of the year. High global production will keep a lid on prices.

Trade performance in 2023-24

The value of Australian cropping exports has reversed its four-year growth trend, decreasing by $8.4 billion (−27.3 per cent) from the previous year’s record to $22.4 billion. This significant drop is mainly due to a decline in wheat exports. They fell by 30.5 per cent to 22.5 million tonnes after a 36.5 per cent cut in 2023-24 wheat production. Despite overall production declines, large carryover stocks from the previous season’s record crop led to new highs in canola and barley export volumes, rising by 9.3 per cent and 9.2 per cent, respectively. Pulses were the only commodity to show consistent growth. Export values climbed 6.1 per cent to $2.7 billion. This was driven by export volumes increasing by 5.4 per cent to 3.1 million tonnes, the second highest on record. Additionally, a softening in grain and oilseed prices, following the peak levels seen after the Russia-Ukraine conflict escalated in 2022, further contributed to the overall decline in cropping export value.

The average export price for all crops fell by 11 per cent from last year to $524/tonne. This was still the third highest on record. Canola experienced the largest year-on-year decline with prices dropping 24.7 per cent to $789/tonne. This was due to an abundant global oilseed supply driven by record production of both canola and soybeans in 2023-24. Average wheat price fell 15.1 per cent to $440/tonne. A record wheat crop in Russia flooded the global market with cheap wheat. This included significant volumes entering Australia’s traditional Asian markets, placing downward pressure on local prices. Barley saw the smallest decline, with average export price decreasing by 8.7 per cent to $399/tonne. China's removal of tariffs on Australian barley in August 2023 made them the top buyer and supported prices throughout the year.

Wheat exports made up 44 per cent of the total value of cropping exports over the past year. In 2023-24, Australia exported $9.9 billion of wheat. This was a 41 per cent decline from the previous year. However, it is 16.5 per cent above the five-year average. A drop in production caused a 33.4 per cent fall in export volumes to key Asian markets, totalling 17.7 million tonnes. This, in turn, led to a drop in export value. Many Asian stockfeed buyers, who had used Australian feed wheat, shifted back to corn or to cheaper Black Sea feed wheat.

Australian barley exports fell 0.3 per cent from last year but remained strong at $3.3 billion. This was the second-highest level on record and 56.2 per cent above the five-year average. A 21.3 per cent drop in barley production for 2023-24 was offset by large carryover stocks from last season's big harvest. This ensured a sufficient exportable surplus. This situation was further enhanced by China lifting tariffs on Australian barley in August 2023, quickly returning as the top volume buyer. Consequently, barley exports to China surged from zero in 2022-23 to 5.9 million tonnes in 2023-24. Additionally, the volume of malt barley, which commands a premium over feed barley, rose significantly with China’s return, increasing by 216 per cent from the previous year to 2.9 million tonnes.

The value of Australian canola exports fell 17.7 per cent from last year to $5.04 billion. Despite an increase in export volumes, this was not enough to offset the decline in average export prices. In 2023-24, global canola production set a record. The EU, Australia's biggest export customer, had its largest crop in six years. As a result, Australian canola exports to the EU dropped 24.8 per cent to 2.4 million tonnes. In addition, record global soybean production in 2023-24 hurt oilseed prices. Canola's average export price fell 24.7 per cent to $789/tonne.

Australia exported $2.7 billion of pulses in 2023-24, growing 6.1 per cent on 2022-23. Export volume also increased from the previous year, despite the overall 2023-24 crop being smaller than the year before. India continued to be the star performer in Australia’s lentil trade with 2023-24 exports climbing 13.6 per cent to 781,000 tonnes. In 2023-24, Pakistan and Bangladesh were the top buyers of Australian chickpeas. However, the volume fell 10 per cent year-on-year to 608,000 tonnes.

Major export markets

China remained the largest market for Australian crop exports despite growth slowing to 3.4 per cent year-on-year. This was a big drop from the 62.3 per cent increase seen the year before. The slowdown was offset somewhat by China’s return to the Australian barley market, with exports totalling $2.3 billion in 2023-24. However, the value of wheat and coarse grains fell due to reduced volumes and lower average export prices.

Japan advanced to the second position among Australia’s export markets, up from third the year before. Japan imported $2.06 billion worth of Australian crops, marking an 8.0 per cent decline from the previous year. This decrease was primarily due to reduced volumes of grains, despite a notable increase in canola imports. Japan’s canola imports surged by 97.3 per cent year-on-year to 1.36 million tonnes, making it the top destination for Australian canola.

India had the highest growth among Australian cropping export markets. It is now the sixth-largest market by export value. The total value of exports to India rose by 18.5 per cent to $880 million, marking five consecutive years of growth. India remained a key market for Australian lentils. Lentil exports rose 13.7 per cent to 781,000 tonnes.

Outlook for 2024-25

Australia's 2024-25 winter crop production is expected to rise by 14 per cent to 53.5 million tonnes. However, export volumes for the 2024-25 financial year are forecast to decline by approximately 10 per cent to 38 million tonnes. In the first half of the 2023-24 financial year, exports were high. In some cases, they set records. This was due to large carryover stocks from the previous year's bumper crop. Strong export and domestic demand have reduced stock levels to their lowest since the end of the 2019-20 season. As a result, 2024-25 exports are expected to be below average in the first half. A return to average levels is likely in the second half as the Australian harvest ends and northern hemisphere grain supplies tighten.

The current global supply and demand balance sheet has global wheat production climbing to a record 798.2 million tonnes. However, with consumption continuing its upward trajectory, ending stocks are set to contract 2.2 per cent 256.6 million tonnes, the lowest level since 2015-16. This should see global values push higher into the back end of the year as supply slowly tightens, which will flow into Australian prices and see the value of wheat exports remain above average at $9 billion.

The global oilseed market outlook remains bearish, with record soybean production expected and ending stocks rising by 19.5 per cent to 134.3 million tonnes. This will exert downward pressure on world prices, including those for canola. However, a positive development for Australian values is the decline in EU rapeseed production. EU imports for 2024-25 are projected to increase by 1.0 million tonnes, presenting an opportunity for Australia to capture a larger share. Australia's premium for non-genetically modified canola will enhance export values. Additionally, there are promising export opportunities for Australian chickpeas and lentils in the subcontinent. India has suspended tariffs on Desi chickpeas until March 2025, creating a tariff-free access window. As a result, chickpea export values are forecast to rise by 65 per cent to $855 million, helping to keep the total export value for all pulses above the five-year average of $1.63 billion.

The ultimate value of Australian crop exports over the next year will hinge on the performance of the winter crop as it develops through spring. Recent August rains have increased confidence, suggesting potential for upward revisions to current forecasts. Additionally, global supply and demand dynamics and market prices will play a crucial role in determining the value of Australian grain exports over the next year.

Source: Global Trade Atlas (GTA) *includes sorghum, oats, maize, buckwheat, millet, rye, and rice.

Source: GTA

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