Australia’s agriculture sectors seek to expand its investment footprint in the food processing industry, as some major companies plan to build processing facilities in the country.
The planned expansion will benefit product exports to countries such as India, which is a significant importer of agricultural commodities from Australia.
Exported chickpea and pulse products to India amounted to more than $921 million between 2016 and 2017, while more than $525 million of wheat was sent to the country during the same period. As demand for these products steadily increased in the last four years, several companies have sought to beef up their export operations.
The planned expansion will eventually benefit equipment suppliers of agricultural track systems, as the increased investment will translate to a higher demand for machinery to plant and harvest crops. Farming businesses intend to move forward with the expansion, amid lower forecasts on wheat harvest.
The National Australia Bank (NAB) trimmed its wheat harvest forecasts between 2017 and 2018 to drop by 600,000 tonnes to reach 22.7 million tonnes. It released the estimates even if rainfall was recorded to be heavier in early August.
Aside from the NAB, the International Grains Council also predicted lower yields on wheat crops. It expects harvest to fall 2.0 million tonnes to 22.8 million tonnes. Unlike in early August, less rainfall in July served as the main factor for the lower forecast. Likewise, Lanworth revised its projection after considering dry weather that occurred in most of ‘Australia’s crop regions since April except for Victoria.’ Its forecast showed wheat harvest to reach between 17.1 million and 26.1 million tonnes
The Australian farming industry’s push to expand in the food processing business represents a boon for exporters. It also provides some optimism on the industry growth prospects, despite lower forecasts for harvest.