General Manager AWB National Pool Sarah Scales today announced an estimated range for 2003/04 AWB National Pool, with benchmark APW pay grade between $205 - $215 per tonne (FOB GST exclusive).
Speaking at the annual ABARE Outlook conference in Canberra, Ms Scales said the 2003/04 opening estimate reflected the outlook for a highly competitive wheat market in the year ahead, with the likelihood of increased supply, lack of new demand and a strengthening Australian dollar.
"Last year we saw US wheat futures prices reach near record levels, driven by droughts and reduced supply in major exporters such as Australia, Canada and the US, and these values have been actively managed for both the 2001/02 and 2002/03 AWB National Pools," Ms Scales said.
"In recent months however we have seen prices come under heavy pressure, with the likely return of normal weather conditions and much larger crops in traditional exporting countries, as well as another large European crop.
"The other very important factor in the international supply and demand picture is the expanded presence of non-traditional exports from Eastern Europe, FSU and the sub-continent. Generally regarded as non-traditional exporters, these nations are taking a growing share of the world wheat trade, and are competing by heavily discounting wheat prices.
"So when you combine a continuing presence from the non-traditional exporters, with a return to bigger crops in the major exporters and a generally flat world demand scenario, it has placed downward pressure on the international market and will make for a highly competitive world market in the year ahead.
"However, there is still uncertainty regarding the production from crops in the northern hemisphere, which remain in dormancy, and with reduced carryout stocks heading into 2002/03 wheat prices will be influenced by a significant weather event in those key producing areas," Ms Scales said.
Ms Scales said the other factor for Australian dollar returns for wheat will be the Australian currency, which had recently moved to its highest level for about three years breaking through US60 cents.
Ms Scales said AWB issued its APW estimate to enable growers to make important cropping and varietal decisions for the coming winter season. Australian Premium White wheat is AWB’s benchmark wheat grade, as it is the largest binning line and varietal pool in Australia.
"Obviously this is only an estimate and is subject to changes in the marketplace, but it is made on our best forecasts," said Ms Scales.
A full range of Estimate Pool Returns for each AWB National Pool pay grade will be released during winter 2003.
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