A new Rabobank report has highlighted South and South-East Asia’s expanding consumer base as a key driver of food demand, presenting a host of opportunities for the exporting of Australian grains and oilseeds.
The report, titled Unlocking Opportunities: Australian Grains and Oilseeds Exports to South and South-East Asia, published by Rabobank’s RaboResearch division, notes that a decline in Chinese grain and oilseed imports, combined with rising geopolitical tensions, may shift focus to Asia as crucial markets for Australian exports.
“A shift towards western diets in many South and South-East Asian nations – which includes more meat, dairy, eggs, and processed food – is driving demand,” the report states.
“And this demand will be met partly by boosting local animal protein production and partly through imports, providing an opportunity for increased Australian feed grain exports to the region.”
Vitor Pistoia, the report’s author and grains and oilseeds analyst at Rabobank, pointed to Australia’s geographic proximity as a key competitive edge that other exporters lack.
According to Pistoia, wheat and feed grain imports in the region are expected to grow steadily, driven by population growth, and an expanding GDP.
“While malt barley exports to South and South-East Asian nations will continue to face fierce competition, due to a favourable global supply, pulses have strong growth potential. Albeit having to factor in the uncertainties of India’s harvests and import duties, which are often influenced by seasonality, as has been seen in recent years,” he said.
Pistoia also noted that changes in global trade, particularly shifts in US policy, could influence trade dynamics going forward.
“South and South-East Asian countries generally have positive trade balances with the USA and many western countries, but negative balances with China and Australia,” said Pistoia.
“Any trade wars could reduce buying power in countries in South and South-East Asia, indirectly affecting Australian farm-gate prices, as there is the possibility consumption growth there might slow,” he said.
Wheat opportunities
Wheat demand in the region is shaped by a mix of local factors, with some countries nearing self-sufficiency and others relying heavily on imports.
The region’s wheat consumption dynamics can be divided into two groups: those nations nearing self-sufficiency and those reliant on imports, said Pistoia. Countries like India, Nepal, and Pakistan are in the self-sufficient category, though Pistoia flagged India as a potentially major importer.
“If India enters the international wheat market as an importer, it can create major opportunities for Australian exporters due to its enormous demand,” he said. “In times of shortage and high local prices, India may remove import duties, as seen in 2016, potentially lifting global wheat prices.”
Meanwhile, nations that rely on wheat imports, such as Bangladesh, only produce around 20 per cent of their
own needs.
“In this set of wheat-importing nations, apart from in Sri Lanka, Malaysia and Singapore, wheat consumption positively correlates with per capita GDP growth, that is, economic growth equates to growing demand for wheat,” said Pistoia.
Pistoia pointed out that import regulations also play a role, citing Indonesia’s annual import quotas for feed grains and the higher taxes placed on them compared to food grains.
“Feed grains usually have higher import taxes applied by importing nations – aimed at supporting local production – providing a larger market for local feed grains, and thus better prices for local farmers,” he said.
Wheat consumption in the region is expected to grow as GDP per capita increases. Pistoia added that Australia’s tailored research into specific grain varieties, such as those for Udon-style noodles, could position Australian exporters well. From 2019 to 2023, South and South-East Asia accounted for 47 per cent of Australia’s wheat exports. For Australian producers, wheat price competitiveness and import regulations will be key to determining future demand in the region.
Pulse Outlook
The region is a major producer and consumer of pulses, but demand still relies heavily on imports, particularly lentils and chickpeas. From 2019 to 2023, chickpeas and lentils made up 84 per cent and 83 per cent, respectively, of Australian pulse exports to South and South-East Asia, with markets such as Bangladesh, India, Pakistan, and Sri Lanka the key importers.
“Pulses have grown to become an important crop in many Australian grain growers’ crop rotations, and this surge in production is expected to continue, based on the profitability of these export markets,” said Pistoia.
However, he warned that currency volatility and unpredictable climatic conditions could present challenges in these markets.
Barley and malt exports
The region’s consumption of beer and other alcoholic beverages remains relatively low due to cultural practices and government regulation, limiting demand for malt barley.
“However, as western diets become more prevalent in South and South-East Asian societies, beer market growth is expected,” said Pistoia.
Australian barley and malt barley exporters will need to remain competitive on price, with global overcapacity in malt production and declining beer consumption in traditional markets increasing cost pressures.
“The current global overcapacity in malt production and declining beer consumption in (Northern Hemisphere) countries, which lead the way in beer consumption, is intensifying cost competition,” said Pistoia.
Oilseeds
While Australia’s canola exports to South and South-East Asia remain small – representing just 11 per cent of total exports from 2019 to 2023 – the report notes the dominance of palm oil production in the region as a limiting factor. Pistoia explained that the region’s vast palm oil industry leaves only niche opportunities for other oilseeds.