Rising fertiliser costs drive downturn in Australian wheat production
Canberra, June 2
Australia's annual wheat harvest is set to fall by 26 per cent year-on-year as a result of rising fertiliser prices driven by the conflict in the Middle East, according to a government report.
The agricultural commodities report published by the Australian Bureau of Agricultural and Resource Economics and Sciences (ABARES) on Tuesday said that national wheat production is forecast to fall to 26.7 million tonnes in 2026-27, down 26 per cent from 2025-26 and 8 per cent below the 10-year average.
A separate crop report also published by the ABARES on Tuesday said that the total area planted to wheat is forecast to fall by 12 per cent to 10.9 million hectares in 2026-27, the smallest area since 2019-20.
Overall, it said that Australian winter crop production is forecast to fall by 21 per cent year-on-year to 54.5 million tonnes, reports Xinhua news agency.
The commodities report said that many growers are expected to leave ploughed land unplanted due to increases in fuel and fertiliser prices, as well as dry conditions and a below-average national winter rainfall outlook.
"The impact of Middle East conflict is significant for Australian agriculture because the sector is export-oriented and farming systems use imports of fuel, fertiliser, chemicals, and packaging as inputs," the report said.
According to the ABARES, Australian grain and oilseed export prices have risen by around 20 per cent since the conflict in the Middle East began, but domestic prices for urea have risen by more than 80 per cent in the same period.
As a result of the declining winter crop production, the bureau is forecasting that the total value of Australia's agricultural output will fall by 5 per cent to 98.3 billion Australian dollars (70.5 billion U.S. dollars) in 2026-27.
Agricultural export value is expected to fall by 9 per cent to 74.8 billion Australian dollars (53.6 billion U.S. dollars), the report said.
— IANS
Reader Comments
It's sad to see how interconnected our world is—a conflict in the Middle East affects Australian wheat farmers, which then impacts global supply chains. And India, being a major wheat producer and consumer, will feel the ripple effects too. We need to invest in alternative fertilisers and sustainable farming methods. Climate change and geopolitics are making traditional farming too risky. 🌾
80% increase in urea prices? That's insane! Our farmers in Punjab and Haryana are already struggling with input costs. If this trend continues, we'll see similar cutbacks in planting here next year. The government should consider subsidies or price controls on fertilisers, at least for small and marginal farmers. Otherwise, food inflation will hit everyone hard.
As an economist, I see this as a classic supply shock. Australia's wheat exports are significant globally, and a 9% drop in export value means higher prices for importing countries like India (when we need to import for buffer stocks). The silver lining is that it might push countries to diversify supply sources and invest in domestic fertiliser production. But the transition will be painful.
Living in Australia as an Indian expat, I see this firsthand. Farmers here are worried—many are leaving fields fallow for the first time in years. It's a reminder that no country is immune to global shocks. India should learn from this: increase strategic reserves of wheat and fertiliser, and push for peace in the Middle East. Conflict hurts everyone, especially the common man. 🕊️
Respectfully, I think this
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