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Australian Weekly ABARES Report


21 March 2013

Australian Weekly ABARES Report - 21 March 2013Australian Weekly ABARES Report - 21 March 2013


The Australian Bureau of Agricultural and Resource Economics and Sciences

Summary of Key Issues

  • Warm and dry conditions across parts of southeast Australia during March to date have decreased soil moisture in the lead up to the winter cropping season.
  • The seasonal rainfall outlook (April to June 2013) indicates that wetter than normal conditions are more likely across most of the north-eastern half of Australia.
  • Large parts of northern Australia, particularly Queensland and the Northern Territory, are currently experiencing dry seasonal conditions.
  • Rainfall across Western Australia’s wheat growing regions at the start of March has been followed up with additional rainfall this week, providing an improved outlook for the winter cropping season.
  • The entire North Island of New Zealand has been declared in drought, with the New Zealand government estimating the dry spell could cost the nation up to NZ$3-billion, with losses in agriculture expected to shave about 1 per cent off economic growth.
  • Water storage levels in the Murray–Darling Basin have decreased by 168 gigalitres this week and are at 68 per cent of total capacity.
  • The Global Dairy Trade weighted average price of whole milk powder increased to US$5116 a tonne on 19 March 2013, compared with US$4298 a tonne on 5 March 2013 and US$3654 on 19 February 2013. These price increases reflect concerns about production shortfalls in New Zealand following ongoing dry seasonal conditions.
  • The world wheat indicator price (US no. 2 hard red winter, free on board Gulf ports) averaged US$324 a tonne in the week ending 19 March 2013, compared with US$315 a tonne in the previous week.
  • The world cotton indicator price (the Cotlook ‘A’ index) averaged US97.2 cents a pound in the week ending 20 March 2013, its highest level for almost a year.
  • The saleyard prices of lamb rose in most states in the week ending 15 March 2013. The largest rise occurred in Western Australia where the lamb indicator price (18–22kg fat score 2–4) rose by around 25 per cent to average 339 cents a kilogram.
  • The wholesale prices of fruit and vegetables were generally higher in the week ending 16 March 2013, relative to the past week.

Climate

Notable Events

  • Warm and dry conditions over parts of southeast Australia during March have decreased soil moisture levels in the lead up to the winter cropping season.
  • The seasonal rainfall outlook (April to June 2013) indicates that wetter than normal conditions are more likely across most of the north-eastern half of Australia, with the highest probabilities of 70 to 80 per cent in northeast New South Wales and southeast Queensland. The temperature outlook for the same period indicates that cooler nights are more likely over South Australia and Victoria (Bureau of Meteorology National Seasonal Rainfall and Temperature Outlook, issued 20 March 2013).
  • Large parts of northern Australia, particularly Queensland and the Northern Territory, are currently experiencing dry seasonal conditions. Meat and Livestock Australia have reported that the lack of available feed has led to a high number of cattle being sent to markets.
  • Rainfall across Western Australia’s wheat growing regions at the start of March has been followed up with additional rainfall this week. This early autumn break has provided timely improvement to soil moisture levels in the lead up to the winter cropping season.
  • The entire North Island of New Zealand has been declared in drought and parts of the South Island are also starting to show the effects of the ongoing dry spell. The New Zealand government estimates the dry spell could cost the nation up to $3-billion, with losses in agriculture expected to shave about 1 per cent off economic growth.

Rainfall this Week

For the week ending 20 March 2013 little or no rainfall was recorded across much of Australia. Storms brought patchy falls to northern Australia, with fronts generating falls in the Western Australia wheat belt, Tasmania and southern Victoria. The highest rainfall total for the week was 163 millimetres at Willis Island, offshore from Cairns in the Coral Sea. For further information, go to www.bom.gov.au/climate/current/weeklyrain.shtml.

Rainfall for the Week Ending 20 March 2013

©Commonwealth of Australia 2013, Australia Bureau of Meteorology
Issued: 20/03/2013

Commodities

Production and Commodities

  • The world wheat indicator price (US no. 2 hard red winter, free on board Gulf ports) averaged US$324 a tonne in the week ending 19 March 2013, compared with US$315 a tonne in the previous week.
  • The world coarse grains indicator price (US no. 2 yellow corn, free on board Gulf ports) averaged US$312 a tonne in the week ending 20 March 2013, compared with US$308 a tonne in the previous week.
  • The world canola indicator price (Rapeseed, Europe, free on board Hamburg) averaged US$611 a tonne in the week ending 19 March 2013, compared with US$620 a tonne in the previous week.
  • The Australian canola indicator price (Portland, Victoria) averaged $538 a tonne in the week ending 20 March 2013, compared with $545 a tonne in the previous week.
  • The world cotton indicator price (the Cotlook ‘A’ index) averaged US97.2 cents a pound in the week ending 20 March 2013, its highest level for almost a year.
  • The United States Department of Agriculture has estimated that cotton production in China has increased by around 6 per cent in 2012–13 (August to July) to 7.6 million tonnes.
  • The world sugar indicator price (Intercontinental Exchange, nearby futures, no. 11 contract) fell by around 1.6 per cent in the week ending 20 March 2013 to average US18.5 cents a pound.
  • The European Parliament on 13 March 2013 voted to extend sugar production quotas and minimum sugar beet prices in the European Union beyond 2015 to October 2020.
  • According to data from the Brazilian Sugar Association, the volume of ethanol exports from Brazil’s Central South region, which produces around 90 per cent of Brazil’s sugarcane, increased by 86 per cent in 2012–13 (April/February) to 3.2 billion litres.
  • The Global Dairy Trade (GDT) weighted average price of whole milk powder increased to US$5116 a tonne on 19 March 2013, compared with US$4298 a tonne on 5 March 2013 and US$3654 on 19 February. These price increases reflect concerns about production shortfalls in New Zealand following dry seasonal conditions so far in 2013. Between 5 March and 19 March 2013, the prices of anhydrous milk fat and cheese increased by around 16 per cent and 13 per cent, respectively. The price skim milk powder increased by around 8 per cent over the same period to US$4050 a tonne.
  • The wholesale prices of fruit were generally higher in the week ending 16 March 2013, relative to last week. The wholesale prices of watermelon (seedless), strawberry, pineapple (smoothleaf), avocado (hass) and blueberry increased while the price of bananas (cavendish) fell.
  • The wholesale prices of vegetables were generally higher in the week ending 16 March 2013 relative to last week. The wholesale prices of bean (round), broccoli, cauliflower, tomato (field gourmet) and iceberg lettuce increased while the price of pumpkin (grey bulk) fell.
  • The Queensland young cattle indicator price (330 – 400 kg live weight C3) fell by around 8 per cent in the week ending 15 March 2013 to 325 cents a kilogram. Prices of medium cows and heavy steers in Queensland fell by 5 per cent and 1 per cent to 265 cents a kilogram and 319 cents a kilogram, respectively.
  • Australian beef and veal production in January 2013 was 159 000 tonnes, 9 per cent higher than in January 2012. Production was higher in all states except South Australia.
  • The saleyard prices of lamb rose in most states in the week ending 15 March 2013, relative to last week. The largest rise occurred in Western Australia where the lamb indicator price (18–22kg fat score 2–4) rose by around 25 per cent to average 339 cents a kilogram. The indicator price in Victoria rose by around 4 per cent to 435 cents a kilogram.
  • The Australian Eastern Market Indicator price of wool increased by around 1.7 per cent in the week ending 14 March 2013 to 1097 cents a kilogram clean. The total number of bales offered at sale decreased by 22 per cent, compared with previous week.

March 2013

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