Noodle demand boosts wheat export

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Australian Export Grains Innovation Centre chief economist Ross Kingwell at the AEGIC office in Kensington.
Camera IconAustralian Export Grains Innovation Centre chief economist Ross Kingwell at the AEGIC office in Kensington. Credit: Michael Wilson

One of the most familiar meals for uni students — mi goreng — is also playing a crucial role in maintaining demand for Australian wheat in its biggest market.

New analysis from Australian Export Grains Innovation Centre has shown the true importance of the Indonesian noodle market to Australian wheat exports, and the challenges being faced.

A whopping 13 billion packets of instant noodles are sold in Indonesia each year, accounting for 15 per cent of all instant noodle consumption on earth, AEGIC chief economist Ross Kingwell, pictured, says.

“Indonesia imports 3-3.5 million of wheat for noodles each year, largely from their preferred supplier, Australia,” he said.

“Due to its stability and magnitude, Indonesia’s noodle market, especially its instant noodle market, will remain a major source of Indonesia’s demand for Australian wheat.”

Professor Kingwell said instant noodles were “by far” the most popular form of noodles eaten in Indonesia, but fresh noodles still “formed a relatively small but still important segment”.

While the story was a positive one for Australia, it was “far from simple”, Mr Kingwell said.

“Noodle consumption per person has gone through incredible growth over the past few decades, however that growth has now plateaued,” he said.

“Nevertheless, due to Indonesia’s strong population growth, overall demand for wheat for instant noodles will continue to grow by 350,000 tonnes by 2030.”

Professor Kingwell said Indonesian millers were learning to incorporate wheat from low-cost competitors including Russia, Argentina and Ukraine, even though they preferred Australian wheat for “its unique quality attributes”.

He said a growing “premium” instant noodle market was emerging as incomes increased, which could present an opportunity for Australia.

“Australia needs to defend its strong position in the instant noodle market, especially at the premium end,” he said.

“Australia also needs to focus on the higher-quality fresh noodle segment.

“Fresh noodles, which make up about 20 per cent of noodle consumption in Indonesia, are more popular among wealthy, urbanised consumers.”

AEGIC analysis also found the Australian wheat industry could capture other opportunities apart from noodles, such as bread, cakes and biscuits.

As Indonesians become more wealthy and urbanised, they will demand more breads, cakes, biscuits and confectionery,” Professor Kingwell said.

“Providing wheats tailored to a wide spectrum of premium-paying markets in Indonesia is a sound risk-diversification strategy for Australia.”

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