Domestic Price of Coarse Grains

IBISWorld expects the domestic price of coarse grains to drop by 7.3% in 2024-25, to $322.7 per tonne. Due to Australia’s high reliance on export markets and limited negotiating power on the global stage, domestic prices closely follow international prices, weather conditions and demand fluctuations. World prices of grains have softened, resulting from increased global coarse grain production. According to ABARES, world coarse grain production is anticipated to hit 1.5 billion tonnes in 2024-25, exceeding the former peak established in 2021-22. Australia’s coarse grain production is poised to expand, yet export volumes are expected to diminish because of weakened demand and increased global supply. China remains the most significant consumer of coarse grains, influencing global feed demand and trade dynamics. Increased global supply contributes to unfavourable trading conditions for Australian coarse grains internationally, likely reducing their domestic price in 2024-25.

Favourable seasonal conditions have benefited high production volumes of coarse grains, like barley and sorghum, noticeably accelerating domestic supply. Ongoing diplomatic tensions between Australia and China have prevented Australian producers from accessing high-value Chinese markets. The Chinese government imposed a tariff of 80.5% on imports of Australian barley in May 2020, effectively eliminating barley exports to the country. As Chinese markets paid premium prices for Australian barley, the tariffs subdued prices as exporters had to find alternative markets. This tariff was lifted in August 2023, partially contributing to recovering demand and prices. Nonetheless, Australian barley has become more competitive in other export markets, including Saudi Arabia, due to solid demand and export controls imposed by major producers Russia and Argentina.