Clogged ports and soaring fertilizer costs are impeding Australia's bid to boost exports of its bumper wheat harvest, worsening a global food crisis.
Australia typically accounts for 10-15% of the 100 million ton annual global wheat trade and was seen as making up some of the shortfall this year from Russia and Ukraine, which together supplied more than a quarter of the world's wheat before Russia's invasion.
But its exporters say they have been unable to cater to the recent spike in overseas demand.
"Our limited port capacity means we are fully booked," said Rabobank senior grains analyst Cheryl Kalisch Gordon. "We're trying to respond to the additional demand in international markets, but we can't move it fast enough to meet that need at this point."
Thanks to above average rainfall, Australia is set to realize a record wheat crop of 36.3 million tons for the 2021-22 financial year that ends June 30, according to the Australian Bureau of Agricultural and Resource Economics and Sciences. This follows a previous best harvest of 33.3 million tons in the last fiscal year.
Grain Producers Australia, an industry body, said that while wheat prices have increased significantly, so have key farm input costs such as fertilizer, fuel and chemicals.
"High input costs are creating significant production risks with this year's crop in Australia that's currently being planted," said GPA Chairman Barry Large, a grain farmer in Western Australia.
"These issues have been front-of-mind for growers who have managed their individual production programs accordingly, with a sharp focus on reducing and minimizing these production risks."
The window to reap windfall gains is closing and the pressure on margins is set to push wheat output lower in the coming fiscal year.