Asia’s Middle Class Changing Demand for Wheat Grain Exports
Asia’s growing middle class, and the changing tastes and diets that accompany higher incomes, are causing a jump in demand for grains, and wheat-based foods in particular.
By 2030 two thirds of the global middle class, or 3.3 billion people, will be living in Asia, according to the Organization for Economic Cooperation and Development. In the Middle East and Africa the middle class will grow by between one and a half and two times in the same time period.
Recent analysis indicates that changes in consumption patterns favoring ‘westernized’ foods are already apparent and should continue to evolve as the middle class is forecast to grow by six times in the next 20 years. This would result in a boon for traditional exporters such as Australia and the U.S., but also may present unique challenges to the supply chain as trade flows shift.
Currently in Asia, pasta accounts for a significant percentage of the milled flour market, particularly in Indonesia, however, bread is the fastest growing segment. The ‘westernization’ of consumption patterns is also causing an increase in grain imports to China targeted for increased demand for beer, and as feed for its growing meat industry.
Australia’s wheat industry was deregulated in 2008 giving suppliers greater flexibility to react to changing trends and demand swings in Asia, but the question remains if Australia will be able to meet this demand as it grows over the next 10 to 20 years, giving the opportunity for increased market share to be taken up by other suppliers including exporters in the Black Sea region.