EVERY man, woman and child in China eats the equivalent of 40 packets of instant noodles a year, but the future for Australia's grains industry lies with South-East Asia, not China.
That was the message to young people in agriculture on the first day of the Innovation Generation conference in Scarborough earlier this week and hosted by GrainGrowers in partnership with AgConnectWA.
Rabobank senior analyst Graydon Chong, GrainGrowers trade and market access manager Cheryl Kalisch-Gordon and CBH Group international marketing manager Sean Cowman independently presented similar messages to the conference.
The Middle East and Africa, which was the destination for 70 per cent of Australian grains under the Australian Wheat Board and single desk regime, has been supplanted by South East Asia as the nation's major grains customer.
Now 45pc - up from 40pc three years ago - of Australia's annual grains harvest goes to South East Asian countries, the speakers said.
South East Asia was the second biggest grains market in the world behind the Middle East and Africa and offered a significant advantage in proximity to Australian producers.
But low shipping freight rates meant Australian grain growers faced stiff competition from the Ukraine and Black Sea area, which produced better yields, and from emerging grain growers such as Argentina with much reduced production costs.
China was still a significant market for Australian grains, but China already grew much of its own grain, the conference was told. More people lived in India, South-East Asia and northern Asia than the rest of the world and South-East Asia, with 650 million people and an annual growth rate of 6pc, was the demand driver, the conference was told.
"Every minute there is an extra 158 mouths to feed (around the world), of which 154 will be in what we classify as regional markets and all of those sit to the north of us in Asia," Mr Chong said.
Within South East Asia, Indonesia was the stand out customer for Australia, taking on average just over four million tonnes of grain - mostly wheat - a year for the past five years compared to China, which takes just over 3.5mt and Japan and Vietnam which each take an average of about 1.75mt, as Australia's top four grains customers.
"It is amazing the amount of boutique bakeries opening up in Indonesia," Mr Chong said.
"The problem they have now is finding enough suitably qualified bakers to run them."
Only a handful of young farmers put their hand up when Mr Chong asked how many had grown crops specifically targeted at the South East Asian market.
"While our markets have changed significantly, how we do things behind the farm gate unfortunately has not," he said.
Demand markets continued to grow at a faster rate than Australia's supply chain could cope with, Mr Chong said.
"Competitive pressure is pushing our exports into the Asian region,'' he said.
"We've (Rabobank) been preparing a forecast and by 2020-21 we estimate South-East Asian wheat demand will grow about 4.5pc.
"That's down a little bit from the previous decade or so - it was growing at about 6.2pc, but the global economy is slowing, and 4.5pc is still robust growth.
"Productivity growth in Australia today is somewhere between 1-2pc so our demand markets are growing much, much faster than our supply.
"We estimate South-East Asian wheat demand will grow from 18.5mt to 24.4mt a year (by 2020-21).
"I'm very optimistic for Australian grains but Australian farmers need to be innovative and to be more globally competitive - innovation is going to be the key," he said.
Dr Kalisch-Gordon identified the Association of South East Asian Nations Australia New Zealand Free Trade Agreement (ASEAN-ANZFTA) as the most important of the international agreements Australia had signed.
The agreement covered the major grain trading customers in Indonesia and Vietnam, as well as growing markets in Malaysia, Philippines, Thailand, Singapore, Myanmar, Brunei Darussalam, Laos and Cambodia.
"There is massive urbanisation happening in ASEAN countries, the population is quite young and looking to pick up on Western trends," Dr Kalisch-Gordon said.
"Unlike India and China, ASEAN compliments our production systems.
"We are not asking these nations to displace their own production, we are supplying them with the raw materials," she said.
But Dr Kalisch-Gordon warned that free trade agreements were not the total answer and in some cases technical compliance was a greater issue and cost than tariffs.
"There is much more work to be done," she said.
Mr Cowman said Indonesia, South Korea, Japan, Iraq, Vietnam, Egypt, Malaysia, Iran, China and Yemen, in that order, where the CBH Group's main grain customers.
It was now difficult to compete in the Middle East North Africa market with Black Sea producers because of low shipping freight rates, he said.
"With the changing global markets, our grain will stay closer to home," Mr Cowman said.
It was the first time since 2011 that WA had hosted the annual conference.