WILL there be “enough room” for Australian wheat exports to south-east Asia within the next decade?
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That has been the focus of a London-based global grains expert’s visit to the region in recent days.
Rabobank global sector strategist for grains and oilseeds, Stefan Vogel, spent two weeks in the country talking with farmers and groups about the challenges and opportunities.
He said growing Black Sea competition meant Australian wheat farmers needed to focus more on meeting quality targets, capitalising on economies of scale and examining domestic freight avenues and costs.
Mr Vogel spoke to growers and industry figures in several Australian states and finished up with visits to Breeza, Wee Waa and Moree.
He said the Black Sea region’s crop yields had gone up as international shipping rates went down.
In Russia, for example, the 2016 harvest was up almost 20 per cent on the average – a record – and the next crop another 15 per cent.
“They’ve shipped as much as they can into their traditional export destinations, like Africa, but that’s not enough demand, so they go further out – and that further out is south-east Asia … where a lot of the traditional wheat exports out of Australia are heading.”
How to respond
But Mr Vogel said Australian growers could respond to the challenge.
International shipping rates were controlled by the global market; the lower they were, the worse for Australia, because it became feasible for European countries to ship to the Asia Pacific.
But low-cost domestic shipping from the farm to the port was “where Australia can get active”.
Labour and land costs were largely beyond farmers’ control, Mr Vogel said, but not input costs.
“That may mean not having the highest yield … It is important that producers try and meet the qualities that are expected on the world market, and it depends on which region you’re in.”
Another advantage was property size, “meaning you can use bigger gear … more efficiently”.