Australia sees strong ASEAN wheat demand
Australia sees strong ASEAN wheat demand
CANBERRA (Reuter): South East Asia provided an important export market for Australian wheat with strongest future growth in demand seen coming from Thailand, Vietnam and Indonesia, the Australian government's commodity analyst said.
The Australian Bureau of Agricultural and Resource Economics (ABARE) said import demand from the Association of South East Asian Nations (ASEAN) was projected to rise to 12.3 million tons by the year 2000 and to 12.39 million tons by 2010 from an annual average of 8.17 million tons in 1993-95.
It said Australia was well placed to supply these markets and in 1993-95 sales to ASEAN countries accounted for 22 percent of all Australian wheat exports.
"But the extent of benefits to the Australian industry will depend both on its ability to provide the products most required by these markets and on competition from the countries which subsidize production and exports," ABARE said.
ABARE said the Uruguay Round of the General Agreement on Tariffs and Trade (GATT), which aimed to increase trade liberalization, was not likely to have a significant direct effect on ASEAN wheat trade with imports relatively unimpeded.
But it said that if the U.S. used its Export Enhancement Program (EEP) to court previously untargeted markets which were important to Australia, it would reduce the expected benefits to Australia from reductions in export subsidization under GATT.
"With continued expected rapid growth in demand for wheat, ASEAN countries, including Indonesia and Malaysia, could be potential new targets for EEP sales," it said.
ABARE said the economies of all ASEAN countries were likely to benefit from the Uruguay Round.
The higher economic growth which resulted would increase demand for wheat.
"However, the reduced distortions to wheat production and trade globally as a result of the Uruguay Round are likely to increase the prices paid by ASEAN countries for wheat imports," the report said.
Australia has been wooing markets in Asia by developing white wheats particularly suited to the production of noodles which Asian countries prefer to the red varieties of North America.
Australian exports to ASEAN countries are predominantly of bulk unmilled wheat although the Australian processing industry envisages opportunities to expand exports of noodles and baking pre-mixes.
But ABARE said Australia's penetration into ASEAN markets was also under threat with the U.S. and Canada also developing white wheat varieties to meet specific market requirements.