Nearly 40 grain growers from across WA have ticked Vietnam and Indonesia off the bucket list after returning from an unforgettable trip to two of the biggest destinations for Australian wheat exports. The group visited South East Asia in late September as part of this year’s CBH Grower Study Tour — the first since 2019 following a three-year COVID-induced hiatus. The nine-day tour focused on the grain marketer’s customers, both big and small, with factory visits ranging from the world’s largest flour mill to a family-owned bakery employing a handful of staff. While the Vietnamese and Indonesian markets varied greatly, CBH Group head of accumulations Trevor Lucas said both were critical to the WA grains industry for similar reasons. “It’s proximity and supply chain advantage, and we obviously grow the quality (grain) they require for their particular demand, so it’s a combination of the two,” he explained. “The freight route from here is cheaper than some of the contestable markets... and we’ve got an established brand with established customer relationships. “They trust us and they have a preference for Australian products.” INDONESIA Indonesia is the second-biggest global wheat importer behind China, with Australia traditionally enjoying the biggest market share. Mr Lucas said that figure stood at about 50 per cent — of which WA accounts for about 70 per cent — after significant expansion in Black Sea wheat production led to it steadily gaining market share in Indonesia. “In 2019, we lost a lot of market share to the Black Sea because of the drought on the east coast… so we’ve had to recapture that and build it back up,” he said. Australian wheat is ideal for making the vast quantities of noodles consumed in Indonesia, with flour millers preferring the product for its whiteness and low moisture. Popular WA varieties include ASW, ASW9, and APW, of which CBH shipped nearly 3 million tonnes last year. While Indonesia historically imported milling wheat only, the volume of wheat for animal feed has increased in recent years. However, Mr Lucas said demand for feed wheat was highly price and government policy sensitive. “Most of what we sell, in terms of wheat, is for food production,” he said. “There is a feed market there, which the government is trying to open up, but that’s a more protected market in Indonesia, because they like to protect the local feed grains, like corn, that they grow.” VIETNAM Vietnam is consistently among the top three markets for Australian wheat, with total imports of 2.5-3Mt annually, worth an average $213 million over the last 10 years. It is home to 20 major flour mills of which the top five comprise about 75 per cent per cent of the market. Mr Lucas said Vietnam ranked “somewhere in the top 20” wheat-importing countries but, as a consumer of both milling and low protein grades, was a less stable market overall. “The Black Sea is a little bit more competitive into Vietnam,” he explained. “A lot of it is feed grain as well, so we’re competing both for both feed and food. “But Vietnam is really price sensitive, and if our (feed) wheat becomes too expensive… they will substitute based on price, whereas in Indonesia, because it’s (predominantly) wheat for food, they can’t substitute that, so it’s fixed. “Vietnam certainly have a preference for Australian wheat when it works, especially into the food industry.” Meanwhile, rapidly growing beer production and consumption during the past decade has seen Vietnam establish itself as one of Asia’s biggest beer markets, leading to growing demand for WA barley. In 2007, Vietnam brewed about 1.4 billion litres of beer and was ranked the 25th top beer-producing country. By 2017, it had overtaken Thailand and South Korea to become the 9th top beer producer with more than 4.3 billion litres produced — 83 per cent of that produced by Japan. In 2022-23, WA exported 352,000t of barley to Vietnam valued at $139m, up by 50,000t on the previous year. WA Agriculture Minister Jackie Jarvis said Vietnam was consistently one of the biggest buyers of WA barley, and the country’s developing taste for craft beers was good news for WA growers. “Vietnam’s beer consumption sits at about 3.8 million litres per year, ranking first in the ASEAN region and third in all of Asia after China and Japan,” she said. Vietnam was WA’s fourth biggest export market for barley and seventh-largest market for wheat in 2022-23, with combined exports totalling almost $640m. Mr Lucas said the WA grain industry’s relationship with both Indonesia and Vietnam was going from strength to strength. Adam Poulsen travelled as a guest of CBH Group.