THE Australian Export Grains Innovation Centre (AEGIC) has warned changes to Indonesian government regulation could decrease the amount of wheat Australian growers export to the fourth most populated country in the world.
WA growers and grain exporters have enjoyed the perks of Indonesia's geographical proximity and reliable buying custom for a number of years now but AEGIC fears tariff rate reductions and the introduction of quotas on wheat flour imports could reduce the potential for Indonesian imports of global wheat by up to 500,000-600,000 tonnes every year.
Reiterating that it was a global figure, AEGIC program leader Roslyn Jettner said the amount was equivalent to 16 per cent of the total 3.7 million tonnes of Australian wheat imported by Indonesia last year.
AEGIC prefaced the news by saying during 2012 Indonesia imposed a temporary 20pc duty on wheat flour imports to safeguard its milling industry from the alleged dumping of Turkish flour.
That duty was afterwards reduced to 5pc.
AEGIC also said recently the Indonesian Government imposed a quota on wheat flour imports of 441,141t until December this year, as well as a restriction of shipments to seven specific Indonesian ports.
Ms Jettner said the move had the potential to impact on the latest forecast of a 6pc increase in wheat imports for 2014 to an estimated 7.1mt, as expected by the Indonesian Flour Millers Associations (APTINDO) in April.
Ms Jettner also said the reduced tariff rate could have flow-on effects with other South East Asian markets like the Philippines, which had also investigated the alleged dumping of Turkish flour.
But the head of CBH's marketing and trading arm Jason Craig said there wasn't any need for immediate grower or exporter concern.
He said any increase in the direct imports of wheat flour into Indonesia from countries that weren't currently buying Australian wheat had the potential to have some impact on the total wheat exports from Australia to Indonesia.
But there were a range of other factors that also influenced the purchase decision including economic factors, the price of Australian wheat when compared to wheat from other origins and the price of comparable foods like rice.
"Indonesia is a very large consumer of Australian wheat, the demand for Australian wheat in the Indonesian market is likely to continue to increase with Indonesia's growing population," Mr Craig said.
Grain Industry Association of WA (GIWA) vice president and Wheat Council chairman Sean Powell, Quairading, also thought along the same lines.
He said 400,000-odd tonnes of flour converted to about 600,000t of grain and if Indonesia filled its entire quota it could result in up to 600,000t of wheat being knocked back.
"It won't all be taken out of WA's current export tonnes," Mr Powell said.
"WA is the major wheat exporter into Indonesia so the news could impact our growers to a degree but the quoted tonne figure is across all wheat tonnes minimising the potential impact.
"The other consideration is that Indonesia would have to take up the full quota which isn't entirely likely."
Mr Powell said the overall impact to the WA wheat industry was really unknown but unlikely to be too significant.
APTINDO statistics showed Indonesian flour imports reached an all-time high of 775,534t during 2010 and were predominantly from Turkey.
Last year total flour import volume was reduced to 205,447t with India becoming a major supplier along with Turkey and Sri Lanka.