The future of Australia’s largest wheat market depends on Australia being able to hold on to our share of the noodle market, effectively target the premium baking sector, and get Australian grain into the growing feed market.
That was the message to the Australian grains industry from AEGIC CEO Richard Simonaitis at the 2019 GRDC Research Updates in Perth on Monday 25 February 2019.
Mr Simonaitis’s keynote presentation “Technical support for the Indonesian wheat industry — our single biggest wheat customer” gave an overview of the current status of the Indonesian market, what the future holds, and what AEGIC is doing in response.
Mr Simonaitis said the story of Indonesia is a great one for Australia.
“Population is growing rapidly, which means more mouths to feed and a larger overall market in Australia’s well-established noodle sector,” he said.
“AEGIC’s analysis has shown that by 2030 Indonesia’s population will jump by another 30 million. People are becoming wealthier, with per capita GDP jumping from US$780 in 2000 to more than US$3800 in 2017 and the middle class exploding from 2 million people in 2004 to 120 million people by 2020.
“People are becoming more urbanised and buying more baked goods and other wheat-based convenience foods – good news for Australian efforts to break into the premium bread sector.
“The animal feed market is growing rapidly, which represents another significant opportunity for Australia.”
Mr Simonaitis said everyone had a part to play to support the Indonesian market and increase value for Australian grain growers.
“Ultimately, Australia needs to keep growing wheat varieties that Indonesia wants to buy, and we need to build their skills and capacity to empower them to get the most out of our product.
“This requires a whole-of-industry approach.”
Mr Simonaitis said AEGIC’s market intelligence on South East Asian wheat quality requirements had provided the industry with a solid grounding on which to position for market growth.
“AEGIC is helping Indonesia through in-market engagement and support, especially in the premium baking sector through our Australian Wheat for Asian baking project. If Australia can capture 10% of the baking market, it would be worth $72 million for the Australian industry,” he said.
“Australian wheat is already well-regarded for noodles and our market intelligence is helping the industry keep ahead of the competition by focusing on quality enhancements .
“We engage expert feed nutrition consultants to go out into the market and communicate the benefits of incorporating Australian grain into feed formulations.”
Mr Simonaitis said Indonesia represented significant long-term value for Australian grain growers.
- Indonesia’s population will jump 30 million by 2030 (263m to 295m) – more than the population of Australia
- Indonesia’s middle class is growing from 2 million in 2004 to 120 million in 2020
- Urbanisation: an additional 67 million people will live in Indonesian cities by 2030.
- Wheat consumption per person has increased from 7kg in 1985 to 22kg in 2016.
- Total wheat imports to Indonesia have increased from 4 mmt in 2000 to more than 11.5 mmt in 2017.
- Indonesia is by far Australia’s biggest wheat market: 4.2 mmt / $1.2 billion each year (average).
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