Key grain market Indonesia set to provide more mouths for Australian grain growers to feed

19.07.2018

THE population of Indonesia is likely to reach 295 million in the next 12 years.

That’s a lot of hungry mouths to feed, and Australian grain producers should be paying attention, says one expert from the Australian Export Grains Innovation Centre.

Ken Quail, speaking at the recent Innovation Generation conference, said with Indonesia’s population and economy growing every year, Australia should look to one of its nearest neighbours for opportunities in the grains market.

“If we think of what our major markets are in Asia, the big standout is Indonesia. They are by far our largest wheat market,” Dr Quail said.

“Indonesia stands out, with a 216 million population that by 2030 will be 295 million. It’s one of our nearest neighbours, and the fourth largest population in the world. By 2030 it is predicted to be the seventh largest economy in the world.”

Rabobank agricultural analyst Wesley Lefroy said Australia already exported a vast quantity of wheat to Indonesia.

“Indonesia in 2017 accounted for 24 per cent of the Australian wheat export market. In 2016 they were 22 per cent,” Mr Lefroy said. “Shipping rates play a role. Because Indonesia is such a close neighbour to Australia, we do have that freight advantage.

“Shipping rates have been quite suppressed over the last six to seven years, and with rising shipping rates, Australian wheat will be in an advantageous position to increase our competitiveness.”

Dr Quail said the Middle East was once a strong market for Australian grains, accounting for about 35 per cent of total wheat exports. “Move on 10 years, and the Middle East has shrunk to 23 per cent while South-East Asia has grown to about 44 per cent,” he said.

“It’s one of our closest markets. In global terms, they offer us better price points.”

Dr Quail said the quality of Australian wheat was highly coveted by Indonesia, and with increased urbanisation driving convenience foods such as noodles and bread, Australian growers ought to think about the market. “The most important attributes for wheat are all related to qualities in a noodle,” Dr Quail said.

“When they buy wheat, they’re thinking of what their customer wants. Australian wheat is renowned for having the best colour stability.”

And Indonesia had said “they don’t need to test every single shipment, because they trust Australian quality”.

 

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