Home > Rabobank predicts competition, deregulation and opportunity for Australian wheat

Rabobank predicts competition, deregulation and opportunity for Australian wheat

Supplier News
article image Graydon Chong

Agribusiness banking specialist, Rabobank forecasts new opportunities for the Australian grain industry in the long term from supplying increasing quantities of wheat into Asia.

According to a recently-released report by Rabobank, the new opportunities will benefit everyone in the Australian grain industry from the farm gate through to the marketer and exporter.

In its report, ‘Competition, deregulation, and opportunity- seismic shifts in Australia’s wheat export landscape’, Rabobank says that the cheaper freight costs into key Asian markets create a competitive advantage for Australian exporters, particularly in years of high global wheat production when there is additional export competition.

However, to meet end user demand in these markets, changes will need to continue throughout the Australian supply chain, particularly as the Asian market grows and consumer behaviour changes.

Report author, Rabobank senior grains and oilseeds analyst Graydon Chong says the Australian market’s ability to service the changing demand profile in Asia will be dependent on the ‘right market signals’ being sent through the supply chain from bulk handlers and grain marketers.

According to Mr Chong, the ability of Australian farmers at the farm gate level to adapt to changes in market demands amidst a deregulation of the wheat export market has been challenging but productive. The responsiveness of growers to market signals regarding the quality, variety and types of crops demanded will be an integral part of the success of exports into the shifting global markets.

For grain marketers and bulk handlers, the ability to meet the specifications required by new and developing export markets will be crucial. They can maintain their competitiveness in global markets by better understanding the volume, quality and timeliness of end-user demand through trade relationships and effectively passing these messages through the supply chain in the form of consistent price incentives.

Highlights of the Rabobank report:

  • Deregulation of the Australian bulk wheat export market has caused a shift in the client base of the Australian wheat industry
  • Increased participation by global grain traders in the Australian wheat export market has resulted in Australian wheat being exported into new markets around the world and particularly Asia
  • Seismic shift in Australian wheat flows over the past decade has resulted in structural changes along the supply chain
  • Shift in demand for Australian wheat from traditional markets such as North Africa and the Middle East to the growing Asian market
  • Asian consumer demands are resulting in new seed varieties for grain growers, changing blending and storage practices for bulk handlers and development of fresh trade links
  • Shift in the Australian wheat export program influenced majorly by rapid emergence of the Black Sea region as the world’s low-cost wheat supplier
  • Black Sea region wheat’s improved quality, and production and logistical cost advantages have displaced Australian exports in many of its traditional markets
  • Increased competition in the global wheat export market will cause further shifts in trade dynamics, and increase Australia’s focus on Asia

Newsletter sign-up

The latest products and news delivered to your inbox