Friday 26 February, 2016
- Potential threat of Ukraine is large, but uncertain
- It is a tide, not a tidal wave
- Australian wheat industry has time to plan
Ukrainian wheat has the potential to displace Australian exports in key south-east Asian markets, according to analysis conducted by the Australian Export Grains Innovation Centre (AEGIC).
AEGIC is currently preparing a major report into Ukraine’s wheat export industry entitled Ukraine: An emerging challenge for Australian Wheat Exports.
This report, covering the Ukrainian wheat industry and the implications for Australian exports in nearby markets, is the end-product of detailed analysis conducted by Professor Ross Kingwell and his team. Professor Kingwell will discuss the report – ahead of its full release in April – at the 2016 GRDC Perth Grains Research Update.
Prof Kingwell said Ukrainian wheat exports had already begun to enter Australia’s key south-east Asian markets.
“We found that Ukrainian wheat exports are currently a modest threat to Australian wheat exports, but their potential threat is large, albeit uncertain for many reasons,” he said.
“Ukraine’s competitiveness is underpinned by greater rates of yield advancement and greater cost efficiencies in their grain supply chains. Over the next decade, these advantages will undermine Australian price competitiveness.”
However, Prof Kingwell said Ukraine was currently less able to reliably satisfy the wheat volume and wheat quality needs of end-users in Asian markets when compared with Australia.
“It’s a tide, not a tidal wave. The Australian wheat industry has time to plan and co-ordinate a useful response, and we should use this opportunity wisely,” he said.
“Forewarned is forearmed: Australia needs good information about its emerging competitors in order to increase the chances of good strategic decisions being made by Australia’s grains industry.
“We need to understand what characteristics of Australian wheat make our wheat preferred in our main markets, and then convey that market information to the Australian stakeholders whose reactions can help increase returns to Australian wheat producers.”
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