WA noodle wheat shortage

A Japanese Government delegation has flown to Perth, as an enormous shortfall of noodle wheat becomes glaringly apparent.

This year, WA will produce around 400,000 tonnes of noodle wheat; just half of the 800,000 to 900,000 tonne demand for noodle wheat from Japan and Korea, as the dry season slashes yields.

It’s seen prices surge above $500 a tonne, but while that might be good news for growers, it puts end users in a difficult position.

Aside from some udon noodle wheat grown in Japan, WA is the sole provider of the grain for the Japanese udon and Korean white salted noodle markets.

The ANW grade noodle wheat is blended with APW2, historically around the 60:40 ratio, but grains industry representatives and buyers are expected to look at whether this ratio might be altered to spread the limited supply.

Representatives from Japan’s Ministry for Agriculture, Forestry and Fisheries met with Department of Agriculture and Food (DAFWA) on Tuesday, where they were briefed on WA’s reduction in noodle wheat production.

DAFWA director of genetic and product innovation Robert Loughman said discussions covered short-term requirements to manage the blend ratio in order to sustain supplies from the 2010/11 harvest, as well as long-term stability of future production.

But Dr Loughman said it was not just the dry season that was responsible for the reduced haul of noodle wheat. He said five years ago, 30 per cent of the wheat sown was noodle wheat, with production in the vicinity of 1.5 to two million tonnes.

“Historically, there’s been quite a large differential between noodle and other varieties, between $30 and $40 a tonne at times, resulting in some over production, ” he said. “That’s diminished to be a much smaller and even negative premium in recent years.”

Growers responded to those market signals by simply growing less, but Dr Loughman said it remained a valuable and important market for WA.

“Now that Australia has successfully transitioned to a deregulated wheat market, the industry will be looking to rebuild stable supply on a sound and sustainable basis by encouraging arrangements whereby growers can be adequately rewarded for growing these varieties given their production risks, ” he said.

In the meantime, Dr Loughman said DAFWA was encouraging industry talks with the Japanese to tackle the short and long-term issues arising from the impending shortage.

But after reaching sky-high prices, grain marketers are warning that changing the blend ration could see prices fall.

Emerald WA manager Rob Proud said in the long run, that would not necessarily be a bad thing.

Mr Proud believes dropping the ratio to below 50 per cent noodle wheat could potentially see prices come back to around $450 a tonne.

“We’ve seen in excess of $500 a tonne and that’s got end users concerned about whether they can afford that, ” he said.

“Those prices are great for growers, but in the end could actually be detrimental.”