Southeast Asian buyers, long reliant on Black Sea and Argentine wheat for feed or as filler wheat in the milling mix, are now more open to buying Australian wheat.
In recent years, Southeast Asian buyers have become highly efficient and flexible in switching between origins to minimize production costs, said S&P Global. At the end of 2020, Australian wheat became more competitive.
Now that Black Sea and Argentine wheat are not aggressively priced, the door is open for Australia to cater to the low-to-medium protein wheat market in the region. In addition, Russia has placed restrictions on wheat exports, working in favor of Australian wheat.
Protein content a concern
Australia is also expecting a higher proportion of low protein wheat, or Australian Standard White but S&P Global notes, that the country is also prepared to step in and fill part of the shortage in high protein wheat from a poor spring wheat crop in North America.
“Nonetheless, North American spring wheat cannot be fully substituted with Australian prime hard due to different properties and functionality in the end product being milled.”