On Thursday, wheat prices rose due to heavier rains dropping down in Australia, which is blamed for food shortages, giving crops a boost.
Wheat futures for May delivery went up by 0.15% to $688.50 per bushel on March 09’s Asian afternoon session.
The country’s farmers are looking forward to their most valuable year yet. According to the Australian Bureau of Agricultural and Resource Economics (ABARES), agricultural exports are expected to hit $75.00 billion.
Based on experts, the sector has been lucky to have a high production level due to the rains. Also, they could have lost a significant crop if the rains had come a bit later or had not dried out in time.
On Tuesday, analysts said that they see record production levels in wheat again. Exceptional growing conditions and high commodity prices lead to this.
On the other hand, the UN’s Food and Agriculture Organization said that production should fall. The plunge roughly equates to 1.00% to 784.00 million tons in the 2023/24 season. It would mark the first decline in five years.
This emphasizes the risks that global grain, like wheat supplies, still faces from Russia’s invasion of Ukraine.
Besides, the war in Ukraine pushed the prices of goods such as wheat, Australia’s most oversized shipment.
War in Ukraine and Climate Issues Pulled Wheat Up
Analysts said that wheat prices had been boosted by drought in other major exporters and the war in Ukraine.
However, they added that drier conditions were anticipated in the coming months with the easing of La Niña. Over the recent years, continuous La Niña periods lowered global temperatures, bringing rains.
Also, similar to other countries, Australia has been hit by concerns in food supply chains. The war between Russia and Ukraine and the COVID-19 pandemic brings these issues.
Furthermore, extreme weather events have dramatically affected the country’s food production. For instance, the major floods on the nation’s east coast caused shortages of some fresh fruits and vegetables last year.