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AEGIC report says grains education could help Australia gain a foothold in the Philippines

Customers check out what's on offer at a bakery in the Philippines.
Photo: AEGIC

Grains industry should consider providing education in SE Asian market, report says.

Providing grains education and technical services in the Philippines could stimulate and support demand for Australian wheat and barley in that country, according to a new Australian Export Grains Innovation Centre (AEGIC) report.

Report co-author Dr Peter White says, while there are other more compelling prospects for Australian grain in South-East Asia, strong population and consumption growth in the Philippines could represent opportunities for Australia.

Dr White says the median age of Filipinos is 23 years which - coupled with the estimated US$25 billion sent home by the 10 million Filipinos living in other countries - means people are consuming more wheat-based products.

"Consumers who are relatively wealthy and young tend to eat more convenience foods, including instant noodles and baked products," he says.

Key Australian market

Dr White says there is significant demand for wheat in the Philippines; in fact, he says, it is already one of Australia's biggest wheat markets. In 2018 it was Australia's second-biggest wheat market by volume (1.4 million tonnnes) and value ($437 million).

"However, almost all of this is for animal feed - a market which is more at risk from lower-cost producers and other commodities," he says.

"The wheat for the food market is dominated by the United States, which has very strong historical ties with the Philippines."

Dr White says the milling industry in the Philippines is currently in a state of flux and increased competition, and mills may be more open to receiving technical support and education from Australia.

"Australia produces wheat that performs well for noodle snacks, instant noodles and cakes and biscuits," he says.

"So, despite the dominance of US wheat in food products, there is opportunity for Australian wheat in the food market.

"To try and gain a foothold in the Philippines food market, the Australian industry should consider providing education and technical services that increase the familiarity of Philippine flour millers and food manufacturers with Australian wheat."

Despite the dominance of US wheat in food products, there is opportunity for Australian wheat in the food market. - AEGIC Economics and Market Insights team member Dr Peter White

Dr White says the animal feed market could also be an opportunity for Australian barley and other grains, such as lupins.

"The feed market in the Philippines has expanded rapidly, but barley is not being used," he says.

"Providing technical assistance to Philippine feed users would highlight the advantages of feed barley and other Australian feed grains, and may stimulate demand for these grains."

The report, "Wheat and barley markets in the Philippines: opportunities for Australia", was produced by Ian Wilkinson (WA Department of Primary Industries and Regional Development) and the AEGIC Economics and Market Insight team (Dr Peter White, Dr Chris Carter, Professor Ross Kingwell and Sean Cowman).

NOTE: AEGIC is an initiative of GRDC and the Western Australian Government.

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