Australia on Tuesday, June 18, lowered its forecast for wheat exports in the 2019-2020 season by almost 18%, since drought is destroying grain crops in the fourth largest world grain export.

The Australian Bureau of Economics and Science for Agriculture and Resources (ABARES) on Tuesday, June 18, announced that wheat exports of this crop, which will begin in July, will be 11.7 million. The previous March estimate from ABARES was 14.2 million tons.

A decline in Australian exports will support global benchmark prices, which have risen nearly 30% over the past six weeks amid fears of declining global supplies.

But declining wheat exports could also hit Australia's volatile economy. Wheat is the country's most profitable rural export from the entire agricultural sector; it produces about 50 billion Australian dollars or 34.39 billion US dollars.

In addition to wheat, ABARES also reduced the estimate of wool production in the 2019-2020 marketing year by almost 9% to 352,000 tons, compared with a March forecast of 385,000 tons.

Australia provides 90% of the world's exports of fine wool used in clothing, but due to the drought, farmers did not have enough feed and water to support livestock.

ABARES also lowered its forecast for milk production in the 2019-2020 season by 2.5% to 8.6 billion liters compared with the March forecast of 8.82 billion liters.