Australia needs a quality grains brand

Australia needs a quality grains brand

Image of David Flenberg

AEGIC chief executive officer David Fienberg

PHOTO: Peter Maloney

Russian and Ukrainian grain traders were represented strongly at the 2015 Global Grain Asia conference in Singapore in March, highlighting the increasing competition from the Black Sea region for a share of the growing South-East Asian market.

Both countries were also the focus of considerable discussion, given their expanding contributions to global grain production as well as current political uncertainties in the region.

For the first time there was also a united ‘Australian precinct’ among the trade stands in an effort to raise the profile of Australian grains and to allay concerns from South-East Asian buyers that Australia is not listening to them.

The Australian Export Grains Innovation Centre (AEGIC) initiated the precinct, which supported more than a dozen industry service providers, government agencies, grower groups and traders. AEGIC CEO David Fienberg says while Australia’s record of quality and reliability is valued, it was clear from presentations there is a far more sophisticated set of systems developing.

“If we become complacent we will be at risk of being unable to do business with these markets,” Mr Fienberg says. “The modern South-East Asian grain buyer requires detailed technical information about the grain they are to receive to best meet their end-product requirements.

“Customers are telling us that they are not getting adequate information from Australia – especially when compared with the US.”

Mr Fienberg says that given Australia’s comparatively small wheat production its future trading value will not be based on volume.

“Demand, for example in Indonesia, is growing five to 10 per cent a year. We won’t be able to compete on volume. We have to provide added value – a niche product.”

The conference highlighted opportunities in health-conscious consumer markets and among the middle classes in Asia. But Mr Fienberg says trapping the value of these opportunities for growers requires investment in food technology, in new classifications and in sophisticated storage and handling facilities.

“Global food preferences and consumer needs have changed significantly over the past 10 to 15 years, compared with the past. We need to ensure the grades into which growers deliver give Australia the best opportunity to meet those consumer needs.”

Mr Fienberg says there is a clear segmentation across the demand chain in Australia, from grower to storage and handling company, to exporter and importer.

“Growers are quite limited in what they can do because they can only deliver into a segregation that is offered to them by the marketer and the grain storage companies. But we somehow need to bring growers closer to these changing market trends.”

He sees a need for a ‘Brand Australia’ to better capture value for Australian growers, to match production to end-user needs and to market those value propositions against international competitors.

Competition raising the stakes

Major changes in the international grain-marketing landscape are increasing the pressure on Australia to make sure it is meeting customer needs and expectations.

Two of Australia’s most experienced grain leaders – Peter Reading, chair of the Grain Trade Association (GTA), and Ron Greentree, who is an independent director of Wheat Quality Australia (WQA) and chair of its Wheat Classification Council – say there must be a strong quality proposition to differentiate Australian wheat.

“We are all aware of the growing importance of China, the fastest growing economy in the world,” Mr Reading says.

“There will be an increasing demand for western-style foods, such as bread, biscuits and pasta, and major wheat exporters will be competing for that market.

“So the stakes are getting higher and if we want some of that action then we have to be better than our traditional competitors such as Canada and the US.”

Mr Reading says the competition was being further intensified by the former Soviet Union grain-producing nations.
As a past chair of GrainCorp and GrainGrowers, Mr Greentree says the biggest message Australia needed to send to its overseas customers is that “we are listening”.

“There is intense international competition for the Asian market and a noodle producer in Shanghai may not know whether he is using Australian wheat or a blend of wheats from Ukraine and the US,” he says.

“We just have to prove to the buyers, the processors and the millers that we are absolutely committed to producing the type of wheat they want – that we care about the quality of our grain.

“We have the credentials – GTA’s Grain Trading Standards and WQA’s wheat classification system are two of the most rigorous quality systems in the world.

“We need to ensure our overseas customers are aware of this,” he says.

“If every Australian grain grower starts to think about meeting customer needs when they choose the variety they plant – not just on its stripe rust resistance or yield – then we will remain the best wheat growers in the world.”

GRDC Research Code WQA00002

More information:

Wheat Quality Australia,
www.wheatquality.com.au


More information:

David Fienberg
08 9368 3785
david.fienberg@aegic.org.au

www.aegic.org.au

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GRDC Project Code AEG00005, WQA00002

Region National, Overseas