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Record grains supply and low world prices require an active approach in key markets

With a record harvest to sell into global markets there couldn’t be a better time for the Australian grains industry to showcase the superior quality, reliability and safety of its products in two of its most important Asian markets.

The Australian Grains Industry Conference (AGIC) Asia last week brought together international buyers and sellers of Australian grain at major events held in both Ho Chi Minh City, Vietnam and in Shanghai, China.

These events were designed to narrow the communications gap which has developed in the supply of Australian grain in the nine years since deregulation.

The Vietnamese market accounts for some 900,000 to one million tonnes of Australian milling wheat annually, along with another 300,000 to 400,000 tonnes of feed wheat.

Positive developments for Australian grains in Vietnam are:

  • a rising demand for Australian malting barley, thanks to the ever-growing local taste for beer
  • a vibrant baking sector based on French traditions which Australian wheat flour is well suited to serve
  • increased demand for meat proteins resulting in a rising demand for feed grains.

In addition, under the ASEAN-Australia-New Zealand Free Trade Agreement, Australia has tariff-free access for our main grain exports. By 2018, all Australian grain exports will be tariff-free.   

There is no doubt that Vietnam has all the underpinnings for continuing to be a significant market for Australian grains.

Meanwhile, the strength of China’s demand for Australian barley and sorghum has strongly supported prices for these two commodities in Australia in recent years. China has been the destination for more than 30% of Australia’s export barley, and more than 95% of Australia’s export sorghum. It is also an important market for Australia’s wheat, canola and oats exports. In total, Australian grain exports have averaged 5.5 million tonnes of grain over the past five years. China’s growing demand for meat, alcohol and western style food products has underpinned this solid export program.

Dr Kalisch Gordon met representatives of the Chinese State Administration of Grain while in Shanghai. Here she is pictured with Madam Cao, Division Chief of the Foreign affairs Department of the State Administration of Grain.

Among the key speakers at the conferences was Narrabri grain farmer and GrainGrowers’ National Policy Group member, Ian Gourley who presented the results of Australia’s National Residue Survey (NRS) for grains showing residue and foreign material compliance to be 98% for containers and more than 99% for bulk exports.

Ian’s presentations couldn’t have been more important given that both China and Vietnam have growing food safety concerns, which stem from growing attention to food safety across the world but more firmly about their own domestic food production.

Reports of grain consignments arriving from non-Australian ports containing bicycles, human bodies and high levels of chemical residues have served to increase the concern and vigilance of local authorities in the inspection of all grain imports.

Australia has an exemplary record in this area but cannot become complacent and must maintain its attention on these fundamental aspects of grain supply, backed up by ongoing compliance throughout the supply chain. We must also remind international buyers that this is what sets Australian grain apart from its competitors.

The Australian Export Grains Innovation Centre (AEGIC) also presented to both the Ho Chi Minh and Shanghai conferences on customer requirements for Australian grain (in Ho Chi Minh City) and on the benefits of utilising Australian wheat in white salted noodles and steamed buns (in Shanghai). Questions from the audience, especially in Shanghai, sought greater knowledge about the classes of Australian wheat and the functional characteristics of Australian grains, while side discussions with AEGIC staff showed a desire for more knowledge to support buying decisions.

The coordinated efforts of industry – through the National Residue Survey, Wheat Quality Australia, the Australian Export Grains Innovation Centre, the Australian Grain Production Stewardship Program, the Grains Industry Code of Conduct and GrainGrowers’ own representations - are all critical to the sustainability of Australian grain exports, and by extension the Australian grains industry. They all serve to confirm Australian grain’s superior value compared with its cheaper competitors.

At a time of global low prices and under the threat of increased protectionism this message has never been more important.  

Dr Cheryl Kalisch Gordon, Trade & Economics Manager, GrainGrowers’

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