AUSTRALIA'S wheat industry is in danger of becoming the “white trash” of import markets in Asia.
That was the warning given to this week’s Australian Bureau of Agricultural and Resource Economics and Sciences (ABARES) Outlook conference in Canberra by David Fienberg, CEO of the Australian Export Grains Innovation Centre (AEGIC).
The Perth-based AEGIC was formed as a not-for-profit company in 2012 by the WA Government and the Grains Research and Development Corporation (GRDC) with an initial five-year term to support the trade and use of Australian grain around the world.
And one of the biggest challenges, Mr Fienberg said, was protecting Australia’s $1.75 billion annual wheat sales to Indonesia which were now being eroded by the likes of Canada.
Similarly, the United States had had a stranglehold on milling wheat exports to the Philippines which were now around 2.2 million tonnes.
Australia’s share of the market was only about 150,000 tonnes and mainly used for stockfeed.
This was despite the fact that Australia’s soft white wheats offered a better, easier-to-process option than the US’s dark northern spring (DNS) wheat for noodle production, he said.
Deregulation of grain imports into Japan had also offered an opportunity for Australia to significantly expand on its current exports of around one million tonnes.
Mr Fienberg said both the Canadian International Grains Institute and the US Wheat Associates had substantial budgets to provide Asian buyers with detailed specifications about the varying quality and milling traits from each harvest and also help them make maximum profit from their grain purchases.
Australia now wasn’t doing much to match those support services, but even if we managed to oust them from the market, our exports of soft white wheat would likely come under attack from other competitors.
Major producers in the Black Sea region such as Ukraine could also supply soft white wheat and another member country, Russia, was gearing up to increase its wheat output by 30 million tonnes in the next 10 to 15 years.
Beer consumption in China was booming and Australia not only needed to supply the right kinds of barley but be able to help the Chinese produce better beer.
Luke Fraser, principal of Juturna Infrastructure, which provides advice on transport reform and investment, told the conference that freight costs for NSW growers were $20 a tonne higher than their counterparts in Canada.
He said most rail infrastructure in Australia was owned and controlled by governments which didn’t want to invest in the upgrades and improvements needed to give producers a more efficient heavy rail system.
Other sources of investment were needed along with a major rationalisation of the number of export ports in Australia.