Domestic price of coarse grains

IBISWorld expects the domestic price of coarse grains to drop by 5.3% in 2025-26, to $308.00 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 in recent years, resulting from increased global coarse grain production. According to ABARES, world coarse grain production is anticipated to hit a record high of nearly 1.6 billion tonnes in 2025-26. Australia's coarse grain production is poised to expand. Of the major coarse grains, barley output is set to grow the strongest, but maize, oats and triticale production is also on track to climb. Export volumes are expected to lift as a result. China remains the most significant consumer of coarse grains, influencing global feed demand and trade dynamics. Nevertheless, increased global supply contributes to unfavourable trading conditions for Australian coarse grains internationally, likely reducing their domestic price in 2025-26.

Favourable seasonal conditions have benefited high production volumes of coarse grains, like barley sorghum, and maize noticeably accelerating domestic supply. Diplomatic tensions between Australia and China prevented Australian producers from accessing high-value Chinese markets for three years. 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 rising export demand. 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.

Domestic coarse grain prices have recorded drastic volatility in recent years. Coarse grain prices are highly volatile, as adverse weather conditions often greatly affect production. Despite improved domestic production, prices surged over the two years through 2022-23, due to global supply disruptions following the outbreak of war in Ukraine. A rebalancing of world supply and demand of coarse grains has driven prices down since 2023-24. Overall, IBISWorld forecasts the domestic price of coarse grains to rise at a compound annual rate of 3.0% over the five years through 2025-26.