Understanding customer needs to drive export value

With the support of the Grains Research and Development Corporation, the Australian Export Grains Innovation Centre (AEGIC) engaged the flour milling industries in India, Indonesia, Japan, Malaysia, Myanmar, the Philippines, Singapore, Thailand, Vietnam and Australia to identify their wheat quality preferences for a wide range of noodle and bread products.

These overseas markets purchase roughly 55 per cent of Australian wheat exports. In each market, the project interviewed companies that controlled 80 per cent of the milling capacity.

The AEGIC project has moved the Australian grain industry’s understanding of the markets’ requirements from anecdotal to being based on quantitative measurement. Grain trading organisations have a better understanding of the grain quality characteristics valued by the customers, and this understanding allows the Australian grains industry to tailor its grain offerings to market segments, improving the competitiveness and value of Australian grain in key markets.

For example, during the research, many of the Southeast Asian processors expressed a keen interest in wheat that could be used in the traditional soft- wheat segments. The biscuits, crackers and cakes segments have all experienced strong growth as affluence increases and diets become increasingly Westernised. US Western White enjoys a historical dominance, and buyers in multiple markets want to diversify their sources of soft wheat supply as a lack of alternatives can lead to mills paying a large premium due to lack of supply. With Australian soft wheat being an alluring prospect, two Australian wheat breeders have commenced soft wheat breeding programs.

The total volume for noodles in Southeast Asia (SEA) is around 5.1 million metric tons (mmt). This is the largest single market for Australian Premium White (APW) wheat, and it is experiencing pressure from Black Sea wheat. Historically, Black Sea wheat has undersold Australian wheat at up to US$20–30/mt. The lower price accounts for poor noodle colour, texture and milling performance. Recognising this threat and achieving improvements in the quality attributes identified by AEGIC will help Australia maintain its value proposition in these markets.

The research verified that Australian wheat was less able to meet baking requirements for the SEA bread market, which totals approximately 4.3 mmt. North American wheat is preferred for baking applications in most SEA countries, which use longer fermentation or sponge and dough processes and formulations high in sugar and fat. The North American wheat attracts a price premium above Australian Hard ranging from US$5–100/t in that market. Understanding the problem helps inform the industry of the improvements in the baking quality of Australian wheat classes required to capture opportunities in the premium-priced bread segment.

Wheat Quality Australia is reviewing its classification guidelines to ensure the industry has a classification system that is well suited to market requirements in the future.