30pc increase in oat plantings

WA oat plantings could increase by a further 30 per cent this year to meet market requirements, according to Premium Grain Handlers’ managing director John Orr.

Mr Orr said the company had already released its new crop contract prices for oats1 grade, at $300 tonne, in anticipation of high demand from its international market place.

Although down on last year’s record price of $365 tonne amid short supply of milling oats because of seasonal conditions and strong demand, the $300 tonne offered by PGH is significantly above the long-term oat price average of around $180 per tonne, he said.

The PGH new crop oats price is also above the $285 tonne for wheat and $235 tonnes for barley for new season crop.

Mr Orr said when farmers compared the gross margins of these crops, oats would fair quite favourably.

“For us to be $300 tonne for next season oats is sending a very strong price signal and demonstrates our confidence in these markets,” he said.

Mr Orr said strong and rising international demand was from the newer markets such as China, India and the United Arab Emirates, alongside the more established Malaysian, South African and Japanese markets.

The Grains Industry Association of WA in its December Crop Report estimated about 513,000ha of oats were planted in 2015.

Because of the dry finish to the 2015 season, much of the WA oats crop harvest was lighter in density and weight than expected, meaning a large amount of grain did not meet the required oats1 or oats2 quality standards.

However, in the past harvest, PGH introduced a new lightweight oats segregation which meant growers could still deliver product as low as 45kg/hl against existing contracts, albeit at a discount.