The world’s grain trade is hitting a turning point in 2026. Supply chain problems and price swings have given way to a glut. Australian grain sellers those eyeing the Indian Sub-Continent (ISC) – India, Pakistan, Bangladesh, and Sri Lanka – face a tricky situation: too much grain but fewer buyers. The ISC area now has full warehouses and is eating more of its own crops. This means 2026 will bring fierce rivalry and force new game plans.
In this Blog Sharp Blue looks at why the Indian Sub-Continent (ISC) counts for Australian grain sellers, Australia’s place in grain sales in 2026, the shifts across the ISC this year how this hits Australian grain sales head-on, and the smart moves growers and traders need to make to weather the “perfect storm” of too much grain worldwide.
Why the Indian Sub-Continent Matters to Australian Grain Exporters
Australia grows wide range of grains and pulses for export to growing Indian Sub-Continent Market. The Indian subcontinent – which includes India, Pakistan, Bangladesh, Nepal, and Sri Lanka – has one of the most populous and food-importing regions in the world. In 2024–25, India alone imported about 1.2 million tons of chickpeas from Australia. By the end of 2025, Australia sent over 1.37 million tons of chickpeas and 0.58 million tons of lentils to Indian Sub-continent region. These numbers show that Indian Sub-Continent is a key market for Australian farmers who grow grains and pulses.
Due to differences in agricultural structures across the region, import dependence is varied across countries; India and Pakistan typically rely on imports of pulses in years when they have shorter crops, while Bangladesh and Sri Lanka are dependent on wheat imports every year. Collectively however, this region represents a significant portion of Australia’s agricultural export revenues. The recent signing of the 2022 Korea-India-Australia Free Trade Agreement (FTA) also provides Australian exporters with greater access to the Indian market (for example, Australian chickpeas will now be subject to a 10% Tariff). Therefore, historically, the amount of grain sold from Australia to the Indian subcontinent has been very large and any changes in these markets will significantly affect the Australian agricultural sector.
Australia’s Grain Export Position in 2026
The Australian winter harvest of 2025-26 is robust, resulting in exportable surpluses. The Australian Bureau of Agricultural Resources and Economics (ABARES) estimates production of a total of 35.6 Million metric tonnes of Wheat from Australia (4% higher than the previous seasons). Similar yield increases can be expected with Barley, Canola, & Pulses. Rabobank state 2025-26 will also see Chickpea and Lentil yields exceeding 1.8 Million metric tonnes (both near record volumes). Exporters responded to events at the start of 2026 by exporting large amounts of products. In November 2025, a record number of barley (913,000 metric tons) was exported (approximately 70% to China), while 629,000 metric tons of canola were sent overseas (mainly due to the lack of a tariff on canola into the UAE). Additionally, wheat exports saw significant increases during the start (Q1/Q2) of 2025-26; wheat exports from Australia for October and November 2025 totaled around 2.84 million metric tons – an increase of 1.71 million metric tons (66%) from 2024-2025’s October and November.
Even though volumes have increased, the market is experiencing pressure on price as well as profitability. Global grain markets have a lot of available grain in the pipeline, which will likely result in a continued weak price environment. In Southeast Asia, many flour mills are switching to less expensive alternatives (i.e., Argentine Wheat Flour) because of high levels of available supply throughout the world. Exporters report that at several major ports ,corn and soybeans continue to receive priority for loading over wheat. If this pattern continues, it could impact future shipments of Australian barley and canola similar to what has occurred in other countries. Therefore, Australia is beginning 2026 with ample production, but due to oversupply throughout the world, exporter prices will continue to be pressured due to an extremely competitive market.
What Has Changed in the Indian Sub-Continent in 2026
There have been massive changes on the Indian sub-continent market from 2026 onward: changes to policy, bumper crop production, and record levels of stock are greatly changing the way that demand is structured. India is in the center of these huge changes. In 2024-25, India produced 117.95 MMT of wheat and with a good monsoon season, current inventories of wheat will be greater than the minimum level (most likely about 18.2 MMT for the Food Corporation of India buffer versus a requirement of 7.5 MMT). There is also as much as 7.5 million tons of wheat inventory sitting with private grain dealers. The total amount sown to Rabi wheat for 2026 is to be 33.42 million hectares (up from 32.80 million in 2025) which means that there will be another bumper crop in 2026. The Indian government announced on February 2026 that they will partially lift the restrictions on wheat from India by authorizing the exportation of 2.5 MMT of wheat and 0.5 MMT of wheat products to reduce their excess inventories and assist in providing some support for farm prices.
In pulses, India had an excellent rabi or winter crop due to favorable rains. The government previously lifted the high chickpea import restriction of 2017 as of 2025, with Australian desi chickpea imports only facing a 10% duty (down from 66%), while lentils are subject to an 11% duty. However, analysts indicate that once the domestic stockpile rebuilds, India may tighten its pulse import regime again after March 2026. (The pace of India’s pulse imports has “been slower since May” and if the stocks continue to increase, there could be an increase in the duty.”
Bangladesh is importing vast amounts of wheat (approximately 6.7 MMT in 2025/26) and pulses but its buyers are extremely price sensitive. As a result of India’s conversion of its wheat supply onto the land for sale to neighboring countries, Dhaka is “the principal beneficiary of New Delhi’s reopening its exportation” – provided that Indian wheat arrives on the land cheaper than other alternatives; in other words, it may use Indian wheat (delivered by land) only where it is cheaper than shipments of Australian or alternative sources when all costs are compared at destination ports.
Conversely, Pakistan has expected a much smaller output in its 2025 wheat crop (approximately 27.5 million tonnes, compared to 31.6 million tonnes previously) and growing consumption of wheat. Pakistan has maintained bans on both wheat exports and wheat imports; however, analysts expect the 2025/26 deficit to be between 1.7 and 2 million tonnes. Once the import restrictions have been lifted, Pakistan will likely import wheat (possibly) pulses or other grains from outside the country to fill any deficit.
As for other neighboring countries (e.g., Nepal and Sri Lanka), their imports of wheat and rice are modest than those of Bangladesh ,with Nepal’s wheat imports being approximately 0.225 MMT and Sri Lanka’s wheat imports to be approximately 1.18 MMT for 2025/26.
Thus, the situation in 2026 will result in India representing the majority (89.67%) of food grains; Bangladesh may seek more cost-effective means of obtaining grain; Pakistan (an inconsiderable urban market until now) could also become a grain-importing country if given permission to do so.
Direct Impact on Australian Grain Exports
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Declining Export Volumes to Indian Sub-Continent
Australia’s exports will experience immediate impacts from the surplus of wheat seen internally in Indian Sub-Continent. The most obvious of these impacts will be the decrease in export volumes from Australia to Indian Sub-Continent. As India has opted to export wheat as opposed to importing it, there will be no demand from India for Australian wheat. The spike in shipments of Australian pulses into India in 2026 will also be subject to change. If India reinstates import duties on Australian pulses after March 2026, Australian chickpea and lentil exports will see a considerable reduction as demand pulses through from India. Lastly, Indian wheat may come off of Australia’s offers to export grain to Bangladesh, while opting for cheap, accessible land trade routes via Nepal/India to Bangladesh. Simply put, Australia will no longer have millions of tonnes of pulses and/or grains exported to Indian Sub-Continent as they previously did.
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Increased Competitive Pressure in Global Markets
This reduction in export volumes from Indian Subcontinent has significant price and competitive implications. The commercial wheat market is already in a position to allow buyers to buy at low prices as stocks are plentiful. The increase of lower-priced Indian wheat into Bangladesh (or other neighboring countries) will help put downward price pressure on global wheat markets. Due to lower demand for grain and the resultant increased global grain supply, Australian grain prices may also decline.
Some analyst forecasts indicate that new-crop wheat prices for Australian wheat may remain “bearish” due to the increase in wheat supply worldwide. Presently, the approximate price of Australian wheat is $263/MT FOB and $270-$280/MT FOB for Indian wheat. Because buyers purchasing Indian grain by land are not incurring ocean freight costs, Indian grain is overall more competitive than Australian grain. Consequently, Australian grain exporters may need to price more aggressively in order to maintain their share of existing markets.
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Strategic Pivot to Alternative Market
Due to shifts in international trade, it is critical that Australia’s trade policy adapts accordingly. Therefore, there are several South Asian contracts that now may never eventuate or materialize which will cause Australian exporters to seek alternative buyers. Industry analysts suggest that Australia should be focusing on North Africa, and sub-Saharan Africa as areas of growing demand to utilize the surplus production being currently exported.
The expected direct impact will be: that by 2026, wheat and pulse exports to the Indian subcontinent will be considerably smaller than previously and prices will be driven down globally due to too much supply.
Secondary Effects on Australian Agriculture
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Tighter Farm Margins and Crop Switching
Reduced demand for exports from Australia means tight margins and lower expectations for grain crops. As export prices fall, growers will face tighter margins on grain crops, and analysts have already indicated that other winter crops (canola and barley) will likely have better profitability than wheat; hence, growers will likely reduce wheat planted area even in high-production years.
Pulses such as chickpeas, which have been a crop of choice for growers in areas where there has been good rainfall, may see reduced demand from India. Therefore, farmers may begin to switch their crop from planting pulses to planting oilseeds or livestock feed grain if they continue to have greater demand.
There are likely to be more defensive cropping decisions made throughout the country with economic consideration given to the relative profitability and risk associated with the grower’s high yield.
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Storage Build-Up and Logistics Pressure
When grain is unable to get out to the customer fast enough, that grain will start to stock up on farms and at ports. Increased amounts of wheat, malt barley or pulses being held on farms or at the port may stress the storage system and subsequently create rail and/or port bottlenecks later on in the season. Accordingly, increased quantities of feed grains or flour resulting from these developing stocks may also push prices down in local market, which produces additional pressure on farm income. As a result, an export slowdown could create significant downside pressure across the entire supply chain from storage operators to transportation networks.
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Cash Flow Constraints and Financial Strain
The majority of agricultural producers will rely on export sales as their primary method for managing cash flow. Generally, grains are sold overseas, to pay for operations, servicing debt, and fund future production. Any reduction in the amount of exported food grains will likely result in lower liquidity; thereby limiting their ability to reinvest and increasing dependence upon credit. Also, lower profit margins in the presence of higher holding costs will add to the pressures on farm balance sheets.
Strategic Response for Australian Exporters
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Market Diversification Beyond Indian-Sub Continent
There is now a growing demand to increase grain imports from countries within the region as opposed to Australia. Major growth areas outside of South Asia exist in sub-Saharan Africa and Southeast Asia. Sub-Saharan Africa is experiencing rapid population growth and thus will continue to require imported grain. Sub-Saharan Africa is an attractive market for global exporters. Likewise, Indonesia, Vietnam, and Nigeria are major competitors to exports of Australian wheat. It is imperative that Australia continue to strengthen trade relationships with Indonesia, Vietnam, and Nigeria by developing an understanding of their respective product specifications (e.g., differences between feed grade vs milling grade)”, strengthening links with the business community to develop capacity in these markets (e.g., assisting in developing food systems) and developing long-term trade partnerships with the above mentioned nations will better facilitate trade with these countries when importing as opposed to exporting wheat.
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Moving Up the Value Chain
Another option for Australian exporters to explore is providing a value add to their product offering. Instead of just exporting raw grains, they can also begin to produce finished products such as flour, cereals, or packaged legumes (e.g., lentils, peas) to increase their access to higher margin sectors (as opposed to just exporting raw grains). Another opportunity is to move into specialty and premium market segments. Australian wheat and barley varieties currently compete very well based on product quality (including high protein wheat for use in baking; malting barley for beer production; and premium/organic legumes) and it may be possible for exporters to create unique positioning (for example) by leveraging Australia’s good reputation for clean, high quality grains in order to develop niche markets with more sophisticated buyers of their product. Additionally, by using product differentiation they may be able to minimize their risk from competing solely on a price basis in large, oversupplied, bulk product markets.
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Strengthening Trade Engagement and Policy Awareness
It is vital that industry and National Governments continue to work together as their relationship matures. This means that the Grain Bodies and Trade Representatives of Australia should always be involved in active discussions with all countries purchasing Australian grain so that they can adapt to changing policies. Regular attendance at Trade Forums, Conferences and Bilateral Discussions within the region allows exporters to quickly react to new information regarding Tariffs, Import Restrictions and competitor crop forecasts. Trade Promotion initiatives such as support from Austrade and combined industry delegations will also be important in ensuring that Australia is competitive within these markets.
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Enhancing Operational Efficiency and Risk Management
In a high-risk, excess-supply environment, operational discipline is critical. Exporters must proactively manage pricing risk using hedging techniques (including forward sales), and utilizing sold product at the optimal time for delivering (e.g., maximising the volume/verifying if product should be exported on a bulk vs. container basis). Supply chain optimisation is also crucial. Coordination of bulk/container shipments; limiting transfer time for inventory stored and improving partnership with logistical suppliers; can all result in lower per tonne export costs. To remain competitive, strategically invest in storage facilities, transportation efficiency and improved ports (i.e., loading terminals that can load products more readily).
Overall, ensuring that every part of the supply chain (from farm gate to vessel) is performing at peak efficiency will be required to safely navigate through a year of lower margins.
Conclusion
All indicators suggest 2026 will be a transition year. Strong harvests across the Indian sub-continent and India’s shift from net importer to limited exporter have reshaped regional trade flows. The result is a clear buyer’s market with tighter margins for exporters.
To have a successful outcome, Australian grain exporters will need efficiency, flexibility, and disciplined cost control to compete in this competitive environment, where operational performance will be a differentiator.
Logistics is no longer just used as support but has become a part of the overall strategy. The ability to coordinate freight optimally, execute port delivery effectively, and ship at a reasonable cost is vital for protecting margins. At Sharp Blue, we partner with growers and exporters to strengthen supply chains, mitigate supply bottlenecks, and enhance shipment reliability as the global market continues to transition.
While 2026 may not deliver the same level of growth as past years, it can provide an opportunity to recalibrate operational processes to meet current market demands and to develop long-term sustainability.
