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.