Australia Faces Risk of Lower Wheat Production Due to Iran War

Darwin, 02 June : Australia’s wheat production is expected to decline this year as rising fertiliser costs linked to the war involving Iran and persistent dry conditions threaten crop yields, according to the Australian government.

The Australian Bureau of Agricultural and Resource Economics and Sciences (ABARES) forecasts that the country will produce about 26.7 million metric tonnes of wheat in the upcoming harvest, nearly 9 million tonnes less than last season. If realised, it would be Australia’s smallest wheat crop in three years.

ABARES said soaring fertiliser prices, driven by disruptions to global supply chains amid the conflict involving Iran, along with below-average rainfall across eastern Australia, are key factors behind the projected decline.

“It will be crucial that adequate and timely supplies of fertiliser are available and that sufficient rainfall is received to meet current yield projections,” the agency said in its quarterly crop report.

Australia is one of the world’s largest wheat exporters. Before the conflict, the country relied heavily on imports of diesel fuel and fertilisers shipped through the Strait of Hormuz, a critical maritime route that has since faced disruptions.

Analysts warn that a smaller Australian harvest could tighten global wheat supplies and contribute to higher food prices in international markets.

The U.S. Department of Agriculture’s Foreign Agricultural Service (FAS) has reported that Australia’s wheat-growing area is expected to decline by 600,000 hectares, or 4.8 percent.

In the 2026/27 marketing year, Australia’s wheat production is projected to fall to 29 million tonnes, down from approximately 36 million tonnes in the previous season.

As a major global wheat supplier, Australia exports wheat to more than 50 markets. In recent years, Indonesia has emerged as the largest destination, accounting for about one-fifth of total exports.