Australia on Wednesday, June 12, lowered its forecast for wheat production in the 2019/20 crop by more than 11%, as a ruthless drought on the country's eastern coast threatens crops for the third year in a row.

The Australian Bureau of Agricultural and Resource Economics and Science (ABARES) cut its projected production of the country's largest agricultural export commodity by 21.2 million tons, compared with its previous March estimate of 23.9 million tons.

“Harvest prospects in regions with very low soil moisture levels are likely to deteriorate,” the statement said.

Australia exports the bulk of its wheat crop, but due to increased domestic demand from the country's livestock sector due to drought, exports from the fourth-largest global supplier are expected to decline.

As a result, traditional buyers of Australian wheat, such as Indonesian and Japanese millers, will be forced to look for alternative markets when prices rise.

Wheat is the country's most profitable agricultural export worth about $ 50 billion, and a reduction in its exports will damage Australia's fragile economy.

Influenced by Australian forecasts, global benchmark wheat prices have risen by about 15% since May.