Australia aims to regain share in southeast Asian wheat market captured by Canada

SINGAPORE (Reuters) — Australia is looking to boost its wheat exports to southeast Asia, after losing some of its market share there as flour millers from the region shifted to high-protein Canadian and U.S. grain, a senior industry official said.

The world’s No. 4 wheat exporter has seen buyers in countries such as Indonesia, Vietnam and Malaysia — typically its stronghold — opt for other suppliers as its overseas sales shrank on lower prime hard wheat output and more local demand.

U.S. wheat values, already down around 15 percent this year on bulging supplies, could come under further pressure if Australia succeeds in winning back its Southeast Asian buyers.

“Canadians are beginning to capture some of the market share in Indonesia. Our aim will be to work more closely with the industry as an Australian representative,” said David Fienberg, chief executive of Australian Export Grains Innovation Centre (AEGIC) that was started in 2012.

“It is not aggressive defence mechanism … it is about trying to find a way to strengthen the relationship between Australia and the southeast Asian market.”

AEGIC was formed as a joint venture between the Grains Research and Development Corporation, owned by Australian farmers, and the Department of Agriculture, Western Australia, to promote the country’s grains and oilseeds.

Due to weak exports, Australia is likely to end the marketing year in September with 6.5 million tonnes of wheat, versus six million tonnes a year ago, traders estimated.

Sales will also be hit by lower 2014-15 high protein wheat output, pegged at around 7.3 million tonnes by the Australian Bureau of Agricultural and Resource Economics and Sciences (ABARES), versus a five-year average of over nine million tonnes.

As a result, exports of the high protein grain will be less than 1.5 million tonnes, traders estimated, versus bumper years when sales can top four million tonnes.

Wheat output will remain constrained due to drought in the next season as well, and while the crop will be the seventh highest on record, yields will on average be just three percent more than in 2014-15, ABARES has said.

AEGIC’s aim is not only to promote Australian wheat but also to find niche markets for grains and oilseeds, Fienberg said.

“It is clear that the Philippines, Myanmar, Vietnam and Indonesia are emerging markets,” he told Reuters on the sidelines of a conference in Singapore.

“We have already had a strong partnership with Indonesia but there are other opportunities developing, so our job is to understand what is required by the consumer.”

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