The global wheat market is expected to remain subdued beyond 2023, with rising production in the Black Sea region set to push prices to near-record lows.
That is according to the Australian Bureau of Agricultural and Resource Economics and Statistics 2018 Outlook report.
The world wheat indicator price is forecast to rise modestly by 6 per cent in 2018-19 to $234 a tonne, up from US$221 last year.
In response to consecutive years of low prices, major export nations are forecast to curb production to 742 million tonnes, following a 1pc reduction in the area planted to wheat.
Global demand is expected to rise until 2022, particularly in the consumer-driven market for milling wheat.
That is when productivity improvements in the Black Sea region are expected to kick in push supply to outstrip demand, putting downward pressure on prices.
ABARES forecasts Australian wheat production to rise to 24 million tonnes in 2018-19, given average climatic conditions for the growing season.
But the area planted is not expected to increase, due to the subdued global market.
If conditions are average, yields should improve, given that last year Western Australia, NSW and Queensland were hit with a range of adverse weather events ranging from frosts to hot and dry conditions.
The area planted to wheat is projected to fall over the period to 2023 due to low world prices, but production is projected to rise modestly to 25mt on the back of productivity improvements.