THE WA noodle wheat industry will continue to allow market forces to dictate the production of noodle wheat, based on latest recommendations from an industry report commissioned by the Grain Industry Association of WA (GIWA).
The recommendations are from the review, The WA noodle wheat industry - current status and future challenges, which was drafted by the Australian Export Grain Innovation Centre (AEGIC) and released last September to provide an overview of current and future demand and challenges for Australian noodle wheat (ANW).
The key messages from the recommendations, report and submissions was that while the differentiated noodle wheat segment was well supported by ANW's markets, Japan and Korea and the WA grain industry as a whole, the agronomic and price benefit of growing ANW versus Australian Premium White (APW) and Australian Hard (AH) meant many growers were moving away from ANW.
Selling to the highly regulated Japanese market, in order to receive a premium for ANW, also remained a challenge .
Other challenges included:
* A lack of incentive for growers to adopt high quality noodle wheat varieties;
* Problems with the stability of the quality of noodle wheat blend since the abolition of the single desk;
* Greater price volatility at grower and customer level;
* Supply disruption due to drought or decreased plantings of ANW.
If the industry was seeking some benefits through free trade agreement with Korea and Japan, it will be left disappointed.
The Japan-Australia Economic Partnership Agreement and the Korea-Australia Free Trade Agreement in 2014 failed to provide any additional benefits for those growing ANW.
Neither agreement makes any reference to ANW.
GIWA wheat council chairman Richard Williams said the council and broader industry would continue to identify opportunities to support the production of noodle wheat in WA.
However, market intervention, such as the development of a single wheat desk for ANW, was not considered necessary.
"GIWA considers that the noodle wheat industry in WA is well aware of the challenges in adopting superior yielding varieties that both meet market demand and perform well for growers," Mr Williams said.
Over the past five years WA has exported about 1.1 million tonnes annually of noodle wheat to Japan (about 20 per cent of WA's wheat crop) which is added to its small, domestic production of about 800,000t.
ANW plantings represents 9-11pc of total WA wheat plantings, which is back on an average historical level of 15-20pc, however Dr Williams said the plantings meet demand from Japan and Korea.
"WA noodle wheat is unique internationally and the only other competitor is the domestic Japanese market," he said.
"Japanese and Korean processors will seek ANW but will blend or use others, however ANW is intrinsically linked to a softer, high quality wheat which means all the preferred colour and taste characteristics for noodles.''
He said in new varieties, such as Zen and the recently released Ninja, could make ANW more attractive to growers.
"Intergrain has been great in developing ANW varieties and Zen is looking very promising in normal cropping rotations as opposed to seed bulk up," Dr Williams said.
"We're also looking forward to seeing how Ninja stacks up in the paddock next year.
"However, market force will prevail in growing ANW plantings and premium."
Intergrain chief executive officer Tress Walmsley said she was "very much on board" with what was outlined in the report.
The company made one of nine submissions to the report.
"There are a lot of unique things about this market - it has a very stable demand, but is not a growth market," she said.
"The challenge is how do we consistently meet that million tonnes and how to manage that process.
She said Intergrain had a long-term investment in noodle breeding and therefore a vested interest in ensuring the future prosperity of the WA noodle industry.
She said the feedback from growers was that there needed to be a $20-25/t premium over APW to grow ANW.
"A key strategy for Intergrain is developing varieties that yield well - ANW needs to be yield competitive with AH varieties, which will keep growers growing ANW," Ms Walmsley said.
She said Zen was already outperforming Calingiri with a 5pc yield improvement.
Ninja was also shaping up to offer growers a similar or better yield than the leading variety Mace.