Droughts, imported wheat and biosecurity threats

aussie wheat 2

By Cate Hull
Recent news that drought conditions on Australia’s east coast prompted the government to approve the import of high-protein wheat from Canada has rippled through the nation’s agriculture industry.

The wheat imports will be the first in more than a decade and come after months of lobbying by grain users desperate for the product.

A shipment of high-protein wheat will arrive in the next six to eight weeks to be processed at Manildra Group’s Shoalhaven Starches plant in the state of New South Wales.

“Due to the worst drought in 116 years, high-protein wheat is in short supply which is critical to the Shoalhaven Starches wheat-processing plant,” the company said in a statement. “The permit will secure hundreds of regional jobs and the continuation of wheat processing at the plant.”

Opposition to the imports was quick to rally. The CBH Group, the major supplier of grain to drought-stricken eastern states in the past year, started an online Stop Wheat Imports petition intended for delivery to the Federal Minister for Agriculture and Water Resources.

CBH Group general manager Brianna Peake said Manildra’s licence to import wheat created biosecurity concerns around it allowing movement of grain out of the port zone, and its market impact.

“The Western Australian grain industry is unique in its ability to provide grain that is free of pests and disease due to our strong biosecurity system,” Peake said.

Agriculture Minister David Littleproud said the permit came with strict biosecurity protocols.

“Biosecurity is always left to the department rather than politicians,” Littleproud said.

“This is not a new development, we have had grain imports before and the reality is the drought has impacted significantly the supply of grain.”

Last harvest, CBH Group received more than one million tonnes of Australian Hard wheat.

The situation is further muddied by the current state of grain trade conditions, which has put some Australia producers in a bind.

James Maxwell, a commodities analyst for Australian Crop Forecaster (ACF), said Australia currently was unable to compete with cheaper wheat from Russia and the Ukraine where production had “gone through the roof”.

“The sheer volume they can produce and the price they can grow it, means it’s just cheaper to buy it from there.”

Which adds up to a headache for the Australian economy as the drop in farm production and the loss of exports to large customers such as Indonesia has pushed down the country’s real GDP growth.

The Department of Agriculture and Water Resources is considering eight other applications from various groups for bulk grain imports.

Cate Hull is the CEO of FreightExchange, a freight and logistics company based in Sydney.