China - new markets, new demands

As China"s economy has exploded, so has its middle class, which is increasing the demand for more diverse foods.

According to Dr Ken Quail, director of grain products at BRI Australia Limited, China"s middle classes now have access to higher quality restaurants, supermarkets and fast-food outlets, supplying increased choice and quality.

He says this is having a particular impact on wheat production, because domestic production has actually dropped (from 117 million tonnes in 1997 to 93 million tonnes in 2003) as growers move to cash in on the demand for diversity.

"There is a huge demand and a gap that needs to be filled," says Dr Quail.

To make the most of this, BRI initiated the "Chinese Wheat Quality" project in 1999. "We identified that we knew little about the quality of Chinese wheats and what"s required of them," he says.

The completed project has identified a large demand for wheat with which to manufacture high-quality bread and noodles.

"Ensuring Australian wheat meets requirements for bread is a challenge," Dr Quail says. "The "sponge and dough process" the Chinese use to manufacture bread better suits US wheat. It"s something that we need to tackle."

However, Australian wheat is well suited to noodle manufacture.

While this project is complete, Dr Quail says it is essential that the Australian industry continually updates its understanding of what China requires: "China is undergoing rapid changes that are shifting the socio-economics of the country and its grain demands. It"s a market that changes so quickly it really is mindboggling. We can"t rest because our competitors know this too."

Dr Quail says projects such as this, which explore both value-adding and new export opportunities, are important for Australian graingrowers.

"We need to stay in the highest price markets for our products. If Australia increases exports to Asia, as opposed to the Middle East, it will reduce shipping costs. Plus, Asia offers huge marketing opportunities for wheat parcels with specific properties."