Domestic Price of Wheat

IBISWorld forecasts the domestic price of wheat to drop 10.2% in 2024-25 to $335.5 per tonne. ABARES anticipates that domestic wheat production will surge during the year on the back of favourable growing conditions and rainfall. However, the majority of the wheat produced in Australia is exported, meaning that domestic wheat prices are also heavily affected by the global price of wheat, which is in turn dictated by global production and demand. Global wheat production is set to tick up slightly, weighing on prices.

Global wheat supply has been heavily disrupted by the Russia-Ukraine war over the past four years. Russia is the largest wheat-exporting nation. Prior to the conflict, the United States Department of Agriculture (USDA) had forecast Russian exports to account for approximately 18% of total wheat exports in 2021-22. Ukraine is also a sizeable exporter and had been forecast by the USDA to contribute 12% of global exports in 2021-22. Although exports from Ukraine had halted following the conflict with Russia, the UN-brokered grain export deal in July 2022 enabled ships to travel through the Black Sea and resume their export presence. The Black Sea deal was extended twice through to the middle of July 2023. The deal helped alleviate complete market turmoil but uncertainty over the longer-term security of global grain supply remains. However, despite the lack of access to the Black Sea Corridor, exports from Ukraine rose in 2023-24. Though, they are set to drop back in 2024-25, according to forecasts from the United States Department of Agriculture.