The Weekly Times, September 30, 2014
THE key to boosting the value of Australian export grain is to promote it properly.
Philippine Association of Flour Millers executive director Ricardo Pinca told wheat industry heads at a recent Australian Export Grains Innovation Centre breakfast that Australian wheat had an image problem after being promoted as an animal-feed product, not a food product.
The Philippines imports 95 per cent of its milling wheat from the US, 3 per cent from Canada and a meagre 2 per cent from Australia.
Mr Pinca said Australia’s clean, green image did not matter to the Philippine market, which just wanted the best wheat at the right price.
Australia was well placed to capture a large portion of North American sales, taking just 10 days to freight to the Philippines, rather than 18-20 days from the US, he said.
Australia just had to make a better effort to be seen as a premium wheat provider.
The Philippines, which uses wheat for bakery products and noodles, imports 22 million tonnes a year for milling.
It prefers a high gluten content of 14 per cent — greater than Australia’s 12 per cent — because 80 per cent of its bakery goods are produced by hand and require strong protein to stand up to the harder treatment.
Australian wheat also has a higher water content than US wheat — 13.63 per cent versus 12.61 per cent — and this is another undesirable characteristic in the Philippine milling market.
“Australian producers don’t need to seek to replace the US wheat completely, but can be blended with its higher protein wheat,” Mr Pinca said.
The US used technicians who went into local bakeries, passed on marketing information and taught ¬bakers how to use American flour, Mr Pinca said.
“There should be an office in Australia purely in charge of marketing to link up buyers and producers,” he said.
Australian flour miller Mark Laucke from Laucke Flour Mills said too many farmers in Australia didn’t understand marketing.
“You have to go to your customers, spend time with them, work out a relationship that is based on mutual trust and need and understand the customer,” Mr Laucke said.
“What Mr Pinca is saying is what we, it appears, don’t understand them, because the very act of selling feed wheat tends to undermine the perceived quality of Australian wheat.”
Mr Laucke said Australian wheat was being sold as an inferior cousin to its competitors because the industry lacked the ability and even the knowledge to represent it as it should be.
“So what that ultimately means is Australian wheat is sold less, sold at a lower price, and that lower price immediately reflects as lower returns to the farmers, meaning that Australian farmers are going to slip back in earnings until finally they stop being viable,” he said.