Basis Commodities – Australian Hay Update – Monday 23rd January 2023

With the 2022/23 growing and baling production behind us, Australia now focuses on exporting what fodder was produced this season. Many regions within the country have suffered greatly due to flooding and the eastern hay crop has been removed from the balance sheet for exportable quality. Much of this year’s exportable crop will leave from Western Australia through Fremantle port with lower grades available through South Australia via Adelaide port. 

Total production is estimated to be 11.2 million metric tonnes of fodder this season with only approximately 900,000 metric tonnes available to meet export grade. This is due to the untimely rain received in the eastern and southern states. Much of eastern Australia’s domestic demand this year will be serviced by last season’s hay as many growers decided to take advantage of high wheat and barley prices, therefore did not plant oats for hay production.

The demographics of feedlots as well as the human population is greater in the eastern states of Australia, while in South Australia and Western Australia, most of the oaten hay and other folder types are grown specifically for the export market as there is not a large domestic demand.

Ocean freight for the first quarter of 2023 has seen some relief with shipping lines either holding rates as they are or passing on small reductions. Unfortunately, this does not translate into closing the gap between the European and Australian competition for fodder into the Middle East.

With China resuming normal activity and moving towards herd immunity, away from a zero covid policy, it is expected that the world economy will recover and ocean freight pricing will follow with greater economies of scale and better rates. 

The Australian Dollar has appreciated against the USD over the last six weeks and rests at .7000. This level is widely considered good for both importers and exporters within Australia. 

Despite the challenging growing season, Australia is still in a good position to support the Middle Eastern market with quality oaten hay for the dairy and equine industries.

Basis Commodities work closely with Balco Australia to export Australian hay into the Middle East. For more information on Balco Australia and its operations, watch this short 1.41 minute video. 

Importers are encouraged to speak with Basis Commodities about their requirements so a profile can be created to program deliveries without disruption with Balco Australia.

Please contact Nader Hassan or Steven Foote, who are available to support any fodder needs for the season. 

Steven Foote
Sydney, Australia
M:0408 308 908
E:steven@basiscommodities.com

Nader Hassan
Dubai, UAE
M:+971566915688
E: nader@basiscommodities.com

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