Consistency key for export grain

24 Mar, 2015 01:00 AM
Comments
29
 
The winner will be who can organise and better target specific markets

AUSTRALIA is in a good position to capitalise on the burgeoning South East Asian grain market, providing it can get a consistent quality product to market, according to Rabobank grains analysts.

St Louis, United States-based Sterling Liddell, together with Graydon Chong, Australian senior commodity analyst, have been touring regional Australia over the past fortnight and the pair say it is time for Australia to take advantage of both its proximity to South East Asia and its counter-seasonal production to most of its major rivals.

“The real growth engine we see is South East Asia, there’s close enough to a billion people living there and there’s strong growth in grain consumption, similar to what we have already seen in China,” Mr Liddell said.

Moving on from protein

While Australia faces stiff competition in terms of pricing from low-cost producers through the Black Sea region, Mr Liddell, senior vice president of food and agribusiness research, said a focus on meeting customer quality needs would hold Australia in good stead.

But this does not simply mean pushing the envelope in terms of protein levels, typically synonymous with ‘quality’ in Australia.

“Australia could be pushed out in terms of the high protein market, there isn’t always going to be a desire for that type of product,” he said.

“Indeed, you look at China this season, they’ve been actively sourcing wheat with good gluten levels, not chasing protein.

“What Australia needs to do is concentrate on producing a consistent quality product.”

Mr Chong said Australia was never going to produce enough grain to satisfy South East Asia’s demands in its entirety.

“I see Australia working as a complementary grain supplier into these markets, particularly if the industry works with customers to deliver what is wanted.

“The Black Sea probably has the most scope to increase production of wheat, but the issue there has always been the variable quality of the product, so Australia’s opportunity will be tied into having a consistent product.”

Mr Liddell said grain marketers needed to be nimble to be able to meet market demand.

“With Chinese demand this year it was those marketers that could get into their millers early and offer high-gluten products that were rewarded.”

Getting Aus grain noticed

Mr Liddell said it was countries with “good organisation and enough velocity to get noticed” that would get the most out of market opportunities.

“In America we have opportunity, but Australia has even more because of its location,” he said.

He said it was crucial for Australia to understand who its competitors were.

“For Australia that is Canada, Russia and the Black Sea region is a major player, but their quality is not consistent so there will always be a role for your low-cost wheat,” he said.

“The winner will be who can organise and better target specific markets.”

He said the US was also in for some tumultuous times in the next 15-20 years, not just with its competitiveness but in storage and logistics.

Mr Chong said Australia was doing a reasonable job in its industry-wide promotion of its product, but added there was room for improvement.

“The promotion of what customers can do with Australian grain could definitely improve.”

In the future, Mr Chong said long-term partnerships throughout the supply chain would also create value.

“Closer links between the end user and the producer will mean the producer will be able to get the message out better about what they want, and it will allow growers the chance to settle with one particular variety as they know it is what their customers want.”

Page:
1
FarmOnline
Date: Newest first | Oldest first

READER COMMENTS

cmt
4/04/2015 6:37:30 PM

Not correct deregular, but that is not surprising for a trader.
Philip Downie
2/04/2015 2:24:08 PM

D8 stick to basis and futures, you know stuff al about quality. You wouldn't even get a pass in quality 101.
Jock Munro
2/04/2015 10:24:18 AM

So deregular, you even know what quality wheat we all grow. I suggest you employ a new spy!
Deregul8
1/04/2015 9:37:19 PM

hey cmt if you get your protein right with good nutrition I can guaratee you all other quality parameters will be right on spec.At least munro can't mix his feed wheat with the neighbours to hitch a ride into the quality stacks anymore. He actually has to learn how to grow quality wheat, as talk is cheap at the sample hut.
GFA
1/04/2015 2:32:11 PM

Now Mario Munro just proves that Jock Munro knows what he is talking about and those traders claiming to farmers or pretending to be speaking out for farmers are just hot air.
Mario Munro
31/03/2015 8:19:18 AM

You grain growers will all end up in same hole as the horticulture sector. It was the single desk that kept you from the slide as you had the control. Unfortunately horticulture was sold out to the traders years ago and now look at the mess. Traders make money no matter what the farm gate return or cost, and the cheaper they can sell it the more they turn over, while taking the same cut.
cmt
30/03/2015 5:07:17 PM

Deregular, do you understand that quality is much more than protein. The highest protein wheat can be the lowest flour yielding wheat when the grain is pinched. Low flour yielding wheat is poor quality. A lot more work is needed to deliver high quality wheat and that is something usually not as important to traders as to millers.
LC
30/03/2015 5:02:35 PM

Very sorry Jock Munro. My previous comment was meant to say your other namesake," joking" JACK Munro!
Jock Munro
30/03/2015 11:57:32 AM

LC, The customers are telling us and you know that the customer is always right. Deregular-You must be a merchant or as someone suggested a consultant.
Deregul8
27/03/2015 7:47:54 PM

Actually it is the merchants driving producers to strive for 'quality'. This coming harvest steep discounts may be in order for those producer failing to fertilizer their wheat crops adequately to achieve protein levels over 10.5%. The ball is in your court Munro.
1 | 2 | 3  |  next >

POST A COMMENT


Screen name *
Email address *
Remember me?
Comment *
 

COMMENTS

light grey arrow
I'm one of the people who want marijuana to be legalized, some city have been approved it but
light grey arrow
#blueysmegacarshowandcruise2019 10 years on Daniels Ute will be apart of another massive cause.
light grey arrow
Australia's live animal trade is nothing but a blood stained industry that suits those who