The report found that grain exports from Russia will surge by 60% from 2015 to 2030, with wheat exports rising from 21.7 million tonnes to 32.5 million during that time, resulting in increased competition in Australia’s key markets in Asia.
The report’s lead author, Professor Ross Kingwell, said Russia’s rapidly growing grain export industry and relatively low supply chain costs were of concern to Australia.
“There is no single silver bullet of response to the competitive challenges Australia’s wheat industry faces,” he said. “A series of actions is required. To remain competitive, it is crucial to keep innovating to ensure higher productivity and efficiencies occur on-farm and throughout the Australian supply chain. We need to keep committing to research and development that lifts industry profitability.”
Key findings in the report include:
- Russia’s government now sees its grains sector as an economic growth opportunity and has embarked on organizational research and development reform to improve the efficiency and effectiveness of its agricultural R&D.
- Productivity gains in Russian farm production and upgrade of local grain supply chains is continuing, underpinning the export competitiveness of Russian’s grain sector.
- Russia’s desire for food self-sufficiency is encouraging domestic feed grain production. This requires Russian wheat breeders to focus principally on yield rather than grain functionality and quality.
Russia is forecast to produce a record wheat crop in 2016-17 (72 million tonnes) and for the first time is expected to be the world’s leading wheat exporter at an estimated 37 million tonnes for 2016-17.
The Black Sea region, which includes Russia as well as other major exporters Kazakhstan and Ukraine, makes up 30% of the world’s wheat trade and is growing fast. Kingwell said Australia must play to its strengths to maximize its competitiveness.
“Although the situation with Black Sea wheat flooding traditional Australian markets is of mounting concern, Australian wheat remains well-placed to retain its market share, particularly in Southeast Asia, where the demand for wheat is growing,” he said. “The Australian grains industry is endowed with an enviable R&D and crop breeding funding system. By contrast, wheat variety improvement and grains R&D in the Black Sea region is less well-funded, less organized and less focused on efficient outcomes. Knowing more about wheat quality traits are most valued by end-users in key Asian markets will help better target wheat breeding in Australia.
Australia is perennially among the top seven wheat producers and exporters in the world. In 2016-17, Australian wheat production is forecast at 26 million tonnes, while wheat exports are expected to reach 17.5 million tonnes.
For the complete report, click here.