Latest news with #PeterHobson
Yahoo
27-05-2025
- Business
- Yahoo
Weak Chinese demand leaves Australia with too much wheat
By Peter Hobson and Naveen Thukral CANBERRA/SINGAPORE (Reuters) - Australian wheat inventories will likely be much higher than last year at the end of the season, pressuring prices, because of a drop in Chinese imports and competition from ample supplies out of rival exporter Russia, analysts and traders said. A fire sale of stored grain may be necessary to clear space before the new wheat harvest in the last quarter of the year, which would weigh on benchmark Chicago futures already trading near their lowest since 2020 because of abundant global supply. [GRA/] Australia sent just 546,000 metric tons of wheat to China during the October to March period, the first six months of its marketing season, down from 2.9 million tons in the first six months of the 2023/24 season and 4.4 million tons in the same period in 2022/23, Australian customs data show. Shipments from Russia, the world's largest wheat exporter, have also remained strong despite the second quarter typically being its pre-harvest lean export season. The next Northern Hemisphere wheat harvest, including Russia's, will ramp up in coming weeks, pouring cheap grain onto the market and limiting Australia's export prospects, said Vitor Pistoia, an analyst at Rabobank in Sydney. "If the current pace of Australian exports continues, we're going to have 5-6 million tons of carryover from last season's crop," he said. "We are building up a massive problem. It's not like the global market is short of supply," he said, adding that it may lead to mass selling of grain that could push prices towards A$300 ($194) a ton from between A$325 to A$350 now. Total carryover including grain from past seasons could be as high as 8 million tons, said a source at an international grain trader based in Australia. "If the new season crops look good, it can become a storage capacity issue. It forces people to sell cheaper into the export market to clear space," the source said. Australia's end-of-season wheat stocks have averaged 3.3 million tons in the last five years, according to data from the U.S. Department of Agriculture. "Four million tons is comfortable," the source said. "More than 6 is getting difficult." Analysts expect Australia to produce 28 million-34 million tons of wheat this year. That would be down from last year's 34.1 million tons but well above the ten-year average of 27.6 million tons, according to government data. Chinese buyers booked four or five 55,000-ton shipments of Australian wheat around the start of May, but these are the only new Chinese purchases this calendar year and have not been followed up with more. China, which was experiencing hot and dry in key growing regions, is likely to see rainfall in those areas through next Tuesday which could further reduce demand for imported wheat. Russia, meanwhile, has continued to ship grain at competitive prices even during its off season, said a grain trader in Singapore. "We were hoping more Australian wheat cargoes would reach destinations in the Middle East and Africa," they said. "There were expectations that Russia would have less to export." ($1 = 1.5530 Australian dollars)
Yahoo
09-05-2025
- Business
- Yahoo
Exclusive-China buys Canadian, Australian wheat as heat hits crop, traders say
By Michael Hogan, Peter Hobson and Gus Trompiz HAMBURG/CANBERRA/PARIS (Reuters) -Chinese buyers bought between 400,000 and 500,000 metric tons of wheat from Australia and Canada in recent weeks, traders said, as heat threatens to damage crops in China's agricultural heartlands. China is the world's top wheat grower and also imports large amounts of grain when domestic supply falls short of demand. Earlier this week, Henan province, which grows about a third of China's crop, issued a risk warning as hot, dry weather threatened the wheat growing in its fields. Chinese buyers have purchased four or five 55,000-ton shipments of wheat from Australia for delivery in July or August and around 200,000 tons from Canada, sources at two major trading firms in Australia said. The wheat is of milling quality. The bookings from Australia were the first made by China from the country since last year, said one of the traders. COFCO, the state-owned Chinese firm that handles most of the country's wheat imports, did not immediately respond to a request for comment. China has in recent years been one of the world's biggest wheat importers, buying in around 11 million tons worth $3.5 billion in 2024. Australia and Canada are typically its biggest suppliers. But shipments slowed sharply after China reaped large wheat and corn harvests last year and have since remained low. China delayed or redirected shipments from Australia earlier this year and imported less than a million tons of wheat in the seven months to March 31, Chinese customs data accessed through Trade Data Monitor show. One of the sources said their company had lowered its forecast of Chinese 2025 wheat production by around 5 million tons but there was no guarantee that more purchases would follow because China has large wheat inventories. "China is well self-sufficient in feed grains this crop year with heavy stocks," said Rod Baker, an analyst at Australian Crop Forecasters in Perth, adding that faltering economic growth in China was also depressing demand for grains. Talk of Canadian wheat sales to China has echoed around agricultural business circles in Winnipeg, Canada's grain industry capital, according to traders. Few concrete details on the sales have emerged. Chinese buyers would have avoided buying U.S. wheat due to tariffs and the trade war between Washington and Beijing, one trader said. China in the past has been a top destination for U.S. wheat sales. The drop-off in Chinese imports earlier in the current 2024/25 season had contributed to subdued international wheat prices, with benchmark futures in Chicago still near a four-year low touched last July. Along with weather risks to China's upcoming harvest, attractive prices may have lured Chinese importers back into the market as the 2025/26 season approaches, traders said. BARLEY Chinese importers also booked a large amount of barley, according to traders. Some said that six panamax bulk carriers carrying around 360,000 tons of French or Ukrainian new-crop barley had been sold for delivery in July or August, with others putting the volume much higher at around 1 million tons, also for shipment this summer. "Chinese wheat and barley import buying has been very quiet in the past year and these are the first major deals I have seen in many months," a German trader said. Feed barley purchases with optional origin were from Ukraine or France. The deals were done at a price of around $250-$254 a tonne delivered to China, one trader said. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
29-04-2025
- Business
- Yahoo
Australia's surge in wine exports to China begins to slow
By Peter Hobson CANBERRA (Reuters) -Australia's wine export boom to China that followed an improvement in relations between the two countries is showing signs of slowing, amid a broader global decline in the number of bottles headed to the world's second-largest economy. China is the Australian wine industry's most lucrative overseas market but its consumption of wine is falling sharply, amid a more gradual decline worldwide. Beijing's lifting of tariffs on March 29 last year triggered a surge in exports. Australia shipped just over A$1 billion ($640 million) of wine to China in the 12 months to March 31 this year, data from industry body Wine Australia show. That amount is just short of the record A$1.15 billion exported in the year to March 31, 2020 and follows a period of more than three years during which trade restrictions were in place and Australia shipped negligible amounts of wine to China. However, exports have slowed after the initial rush, totalling A$126 million in the first three months of 2025, the least for any January-to-March quarter since 2016. The influx of bottles from Australia in 2024 led to the first annual increase in China's wine imports since 2018, Chinese customs figures accessed using Trade Data Monitor show. China's imports from other nations such as France, Chile and Italy have more than halved since 2018 and continue to trend lower. "Australia has performed exceptionally well to get to a billion dollars," said Peter Bailey, market insights manager at Wine Australia. "There definitely has been a growth for Australia is not assured." China's trade barriers – imposed during a political spat between Beijing and Canberra in November 2020 – worsened Australia's wine glut, leading to huge inventories, a plunge in grape prices and a purge of vineyards. Wine Australia said China will not solve the oversupply problem as it is importing a smaller number of pricier bottles than before. Adding to those problems, Australia's wine exports to the rest of the world fell in the 12 months to March 31, it said. Bailey said Australia could benefit from Chinese tariffs on the United States, which will likely halt U.S. wine exports to China worth around $50 million a year, and from Canada's shift away from U.S. wine, but it was too early to know for sure. ($1 = 1.5601 Australian dollars)
Yahoo
08-04-2025
- Business
- Yahoo
Trump attacked Australian beef, but industry looks like tariff winner
By Peter Hobson CANBERRA (Reuters) - On the day Donald Trump announced tariffs on imports from a dizzying number of countries last week, the U.S. president gave a special mention to Australian beef. "They won't take any of our beef," he said of Australia, which has banned U.S. beef due to mad cow disease concerns for over two decades. "I don't blame them. But we're doing the same thing right now, starting at midnight tonight." But Australia's beef industry is feeling relieved, as Trump's 10% tariff on the country's products is not enough to shrink beef exports to the United States running at record levels averaging $275 million a month in the six months to February, industry insiders said. Meanwhile, tit-for-tat tariffs imposed by China, along with Beijing deciding not to renew the local registration of hundreds of U.S. meat facilities, threaten U.S. beef exports to China worth around $125 million a month, giving Australia and others such as Brazil, Argentina and New Zealand an opportunity to increase their shipments. "I'm not too stressed by 10%," said Andrew McDonald, whose Bindaree Food Group runs meat processing facilities in Australia and ships beef to the United States. He said the tariff announcement had revived interest in Australian beef from U.S. buyers who had paused orders for weeks while waiting to see what Trump's tariff action would look like, and that demand for Australian beef into China was rising. "It's a good outcome for Australia," he said. QUARTER POUNDER U.S. beef imports are high after years of dry weather shrank cattle numbers to their lowest since the 1950s, reducing production and raising local prices. Analysts said it will take years for domestic production to grow. Australia, with a herd swelled by wet weather, is flush with supply and has become the biggest shipper to the U.S., offering lower prices and lean cuts that the U.S. lacks. Imported Australian lean trim beef in the U.S. was priced around $3.12 a pound - or almost half a kilogram - before the tariff, said Rabobank analyst Angus Gidley-Baird. The tariff lifted that to $3.43 a pound, still well below the local product which was priced around $3.80, he said, adding just 2.5 cents to the cost of a quarter-pounder made partly from Australian beef. While extra costs are likely to be shared through the supply chain, a sharp fall in the Australian dollar versus the U.S. dollar means Australian producers will feel little pain, analysts said. A cheaper currency is an incentive for U.S. buyers to increase purchases and means Australian sellers receive more local currency per U.S. dollar they receive. The only major beef exporters not subject to U.S. tariffs are Canada and Mexico, but they have limited ability to significantly increase shipments in the short term, said Commonwealth Bank analyst Dennis Voznesenski. China is the only major buyer of U.S. beef to have retaliated to Trump's tariffs. The country is the third-largest importer of U.S. beef after South Korea and Japan, with the United States accounting for 10% of its beef imports by value.
Yahoo
08-04-2025
- Business
- Yahoo
Trump attacked Australian beef, but industry looks like tariff winner
By Peter Hobson CANBERRA (Reuters) - On the day Donald Trump announced tariffs on imports from a dizzying number of countries last week, the U.S. president gave a special mention to Australian beef. "They won't take any of our beef," he said of Australia, which has banned U.S. beef due to mad cow disease concerns for over two decades. "I don't blame them. But we're doing the same thing right now, starting at midnight tonight." But Australia's beef industry is feeling relieved, as Trump's 10% tariff on the country's products is not enough to shrink beef exports to the United States running at record levels averaging $275 million a month in the six months to February, industry insiders said. Meanwhile, tit-for-tat tariffs imposed by China, along with Beijing deciding not to renew the local registration of hundreds of U.S. meat facilities, threaten U.S. beef exports to China worth around $125 million a month, giving Australia and others such as Brazil, Argentina and New Zealand an opportunity to increase their shipments. "I'm not too stressed by 10%," said Andrew McDonald, whose Bindaree Food Group runs meat processing facilities in Australia and ships beef to the United States. He said the tariff announcement had revived interest in Australian beef from U.S. buyers who had paused orders for weeks while waiting to see what Trump's tariff action would look like, and that demand for Australian beef into China was rising. "It's a good outcome for Australia," he said. QUARTER POUNDER U.S. beef imports are high after years of dry weather shrank cattle numbers to their lowest since the 1950s, reducing production and raising local prices. Analysts said it will take years for domestic production to grow. Australia, with a herd swelled by wet weather, is flush with supply and has become the biggest shipper to the U.S., offering lower prices and lean cuts that the U.S. lacks. Imported Australian lean trim beef in the U.S. was priced around $3.12 a pound - or almost half a kilogram - before the tariff, said Rabobank analyst Angus Gidley-Baird. The tariff lifted that to $3.43 a pound, still well below the local product which was priced around $3.80, he said, adding just 2.5 cents to the cost of a quarter-pounder made partly from Australian beef. While extra costs are likely to be shared through the supply chain, a sharp fall in the Australian dollar versus the U.S. dollar means Australian producers will feel little pain, analysts said. A cheaper currency is an incentive for U.S. buyers to increase purchases and means Australian sellers receive more local currency per U.S. dollar they receive. The only major beef exporters not subject to U.S. tariffs are Canada and Mexico, but they have limited ability to significantly increase shipments in the short term, said Commonwealth Bank analyst Dennis Voznesenski. China is the only major buyer of U.S. beef to have retaliated to Trump's tariffs. The country is the third-largest importer of U.S. beef after South Korea and Japan, with the United States accounting for 10% of its beef imports by value.
