The recent drop in the Australian dollar has provided significant benefits for exporters in the country. This decrease in currency value, not seen since March 2020, has created a favorable environment for Australian exporters amidst the ongoing trade tensions between China and the United States.
During the height of the COVID-19 pandemic, the Australian dollar fell to 0.55 US cents, its lowest level since 2003. At that time, eastern Australia was also grappling with a severe drought that had started in 2017, leading to a grain deficit in New South Wales and Queensland. Grain shipments from South Australia and Western Australia helped fill this deficit, with WA being a major supplier to eastern Australia.
However, the current low in the Australian dollar comes at a time when NSW, Qld, and Victoria have surplus sorghum and wheat available for export. In contrast, South Australia is facing a scarcity of current-crop barley and wheat, while WA experienced its third-largest winter crop in 2024-25.
The weaker Australian dollar has opened up a window of opportunity for exporters in eastern states and WA to secure cargoes before the currency rebounds. This correction in currency values and market indicators can be attributed to US President Donald Trump’s announcement of a 90-day pause on tariffs for certain countries, excluding China.
China, a significant buyer of Australian sorghum for over a decade, has been impacted by the tariffs imposed by the US, leading to a surge in Australian sorghum exports. Australia has the potential to become a major supplier of sorghum to China if the tariffs between the US and China remain in place.
The drop in currency has also boosted grain prices, with delivered Newcastle and Brisbane sorghum prices reaching A$400/t. The Clear Grain Exchange (CGX) witnessed increased buying interest in response to the low dollar, leading to improved grain prices across the country.
In addition to sorghum, canola and barley have also seen strong demand, with indications of a tight ending-stocks scenario in Australia. Ongoing dry conditions in South Australia and western Victoria have further fueled the demand for feed barley, while canola prices have rallied in both eastern and Western Australia.
Despite the challenges posed by the trade tensions and currency fluctuations, the Australian grain industry remains resilient. With a strategic approach to pricing and market dynamics, Australian exporters can capitalize on the current market conditions and maintain their competitiveness in the global market.
In conclusion, the recent drop in the Australian dollar has presented a unique opportunity for exporters in the country to leverage their competitive advantage and expand their market reach. By staying informed about market developments and adopting a proactive approach to pricing and selling strategies, Australian exporters can navigate through the challenges and capitalize on the benefits of a low currency environment.
