Australian Durum Wheat (ADR) for Japan

Australian Durum Wheat (ADR) for Japan Matt Yamamoto, Project Leader, AEGIC Dr Mike Sissons, NSW DPI Dr Gururaj Kadkol, NSW DPI A/Prof Jason Able, University of Adelaide November 2017

Australian Export Grains Innovation Centre (AEGIC) National and independent innovation centre for Australia s grains industry. Centre of science, technology and innovation for Australian grains. Commenced operating in November 2012. AEGIC is an initiative of GRDC and the Western Australian State Government Purpose AEGIC exists to increase value in the Australian grains industry. Vision To be Australia s leading organisation for market insight, innovation and applied technology in the grains industry International flour millers at harvest time in Australia works on behalf of Australian grain producers to understand and support the quality requirements of customers and end-users of Australian grains Collaboration with overseas customers on Australian Wheat for Asian Baking

AEGIC does this through: Gathering market information and conducting economic, supply chain and market analysis Engaging with millers, processors, maltsters and brewers to identify their current and future grain requirements AEGIC deploys two grain laboratories in Sydney and Perth Providing market signals back to plant breeders and the Australian grain industry Providing technical information and support to international users of Australian grain Australian wheat technical seminar held in Tokyo in April 2017

Ongoing market engagement with Japan and Korea In addition to work in strengthening Australian s export grain relationship with the Japan and Korea, AEGIC is targeting a range of end use products including udon noodles, yellow alkaline noodles (ramen), instant noodles and pasta with the aim of maintaining and increasing these markets. Examples include: Annual sensory assessment of advanced noodle lines with the Japan Flour Millers Association (JFMA) to ensure the Japanese market s acceptance of new Australian noodle wheat varieties and; Sensory evaluations of 2016-17 APH and AH trials are currently underway to understand their potential use in ramen noodles

Introduction AEGIC, aware of potential changes to the SBS system, has been considering how Australian growers might be able to capitalise on these changes AEGIC with support from Durum Breeding Australia (DBA) [a consortium of NSW DPI, GRDC and the University of Adelaide] have been examining how Australian durum wheat quality compares to that of Japans traditional durum wheat supplier, Canada The project has been divided into several stages. Stage 1 - Technical evaluation of Australian durum grain samples in Japan Stage 2 - Reporting results to Australian industry stakeholders and discussion on next steps Stage 3 - After considering feedback from industry determining any further actions

Outline Overview of the wheat and durum wheat market in Japan Reasons for Project Durum wheat for Japan Outcomes of Stage 1: Evaluation by Japanese flour mills Australian durum wheat production Key breeding objectives for Durum Breeding Australia (DBA) Some considerations for the Project in the future Industry input for review

Share of Food Wheat in Japan (Imports and Domestic) Total ~5.8 million tonnes (5 Year Average for FY2011 to 2015, Unit: x 10,000 tonnes) Domestic, 73, 12% Australia, 91, 16% USA, 275, 47% Canada, 144, 25% Source: MAFF

'000 tonnes The volume of different food wheat classes imported into Japan 1,800 1,600 1,400 1,200 1,000 800 600 400 200 0 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 US HRW (11.5%) 704 823 908 781 867 745 880 980 727 855 790 DNS 1,304 1,414 1,264 1,389 1,359 1,391 1,507 1,246 877 1,245 850 CWRS(1CW) 919 860 878 826 677 779 1,049 1,037 1,228 1,258 1,527 Canada Durum 223 226 217 246 196 190 272 170 210 222 219 US Western White 425 426 773 709 771 755 867 820 610 775 683 ASW blend 815 872 761 711 815 966 911 870 759 794 737 APH 253 275 92 64 153 129 122 101 83 83 84 ASW blend: 60% ANW and 40% APW Source: MAFF

Wheat flour production by product type, Total 4.9 million tonnes (Unit: x 1000 tonnes) For household, 148, 3% Industrial Use, 59, 1% Confectionary, 544, 11% Others, 524, 11% Bread, 1,955, 40% Noodles, 1,630, 34% Semolina production for spaghetti and macaroni is estimated at just under 10% in the noodles.

tonnes Supply of Pasta in Japan (Domestic production and Imports) Supply of Pasta in Japan Domestic Production *Imoports(spaghetti and macaroni) 180,000 160,000 140,000 120,000 100,000 80,000 60,000 40,000 20,000 0 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 Source: Japan Pasta Association

Japan durum wheat imports TONNES 250,000 200,000 150,000 100,000 50,000 Japan durum wheat imports - 2009 2010 2011 2012 2013 2014 2015 2016 Italy - - - - 39 - - - Australia - 206 - - - - - - France - - 218 - - - - - USA 351 637 6,962 210 385 499 2,737 2,342 Canada 213,154 177,486 239,383 196,115 208,703 234,304 218,202 182,157 Price (CIF Japan ) of Durum wheat imports by Japanese government (MAFF) (A$/tonne) 2009 2010 2011 2012 2013 2014 2015 2016 Ave World 510 330 520 460 420 460 620 420 468 Canada 510 330 520 460 420 460 620 420 468 United States 710 580 450 630 730 710 940 690 680 France 0 0 760 0 750 0 0 0 - Australia 0 270 0 0 0 0 0 0 - Source of Data: Japan Ministry of Finance (HS Code: 100119010)

The Japanese market for Durum Japan imports approximately 200,000 tonnes of durum wheat per annum and Canadian durum wheat has dominated the majority of this market for a long time. Japanese users are interested in Australian durum wheat because they are looking to establish another good source of durum grain to diversify their supply chain. There are five Japanese flour millers (see below) which produce durum wheat flour (semolina). The first four millers are the largest millers in Japan, which account for approximately 75 to 80% of the total flour market share in Japan and those four flour millers are most likely to have a similar or higher market share on durum wheat. Nisshin Flour Milling Inc. Nippon Flour Mills Co., Ltd. Showa Sangyo Co., Ltd. Nitto Fuji Flour Milling Co., Ltd. Asahi Flour Milling Co., Ltd. Japan is a very reliable and long term market, once business has been established, it is usually enduring if we can perform well

The Japanese market for Durum Canadian Durum wheat export by country (Unit: tonne) Ranking Importers 2012 2013 2014 2015 2016 Ave. 1 Italy 534,061 545,700 1,397,226 1,088,558 939,269 900,963 2 Algeria 856,523 567,714 855,005 731,272 944,965 791,096 3 Morocco 554,698 705,695 740,363 508,847 623,696 626,660 4 USA 509,205 763,591 762,056 583,574 294,788 582,643 5 Venezuela, 332,158 449,017 376,142 314,153 23,000 298,894 6 Belgium 213,962 201,514 368,028 156,262 193,006 226,554 7 Japan 178,475 227,922 219,216 212,622 209,334 209,514 8 Tunisia 211,211 154,305 125,981 195,704 98,900 157,220 9 Peru 84,229 146,040 137,019 151,098 106,349 124,947 10 Turkey 57,100 115,520 103,719 83,602 200,220 112,032 Others 362,049 385,461 529,659 449,677 467,805 438,930 Total 3,893,671 4,262,479 5,614,414 4,475,369 4,101,332 4,469,453 Source: TRADEMAP Unit Price of Canadian Durum wheat export (Unit: AUD/tonne) Ranking Importers 2012 2013 2014 2015 2016 Ave. 1 Venezuela 361 371 378 582 500 438 2 USA 391 370 382 517 418 416 3 Japan 378 370 381 531 388 410 4 Algeria 359 371 378 513 368 398 5 Tunisia 406 369 371 409 417 394 6 Morocco 366 371 399 451 372 392 7 Peru 347 369 378 446 389 386 8 Belgium 358 366 397 442 364 385 9 Turkey 370 389 409 390 343 380 10 Italy 350 368 399 427 347 378 World 366 371 389 476 369 394 Source: TRADEMAP

Reasons for Project Durum wheat for Japan Diversification for Australia and Japan: Diversification of Australian durum wheat export markets away from its current dependency on the Italian market. Japanese users are interested in looking to establish another good source of durum wheat to diversify their supply chain. Australian Durum Wheat Exports 5 Year Ave 2012-16 (tonnes) Italy 165,569 83% Total 198,840 % Japanese Durum Wheat Imports 5 Year Ave 2012-16 (tonnes) Canada 214,331 99.6% Total 215,299 %

Reasons for Project Durum wheat for Japan Italy Durum Wheat Import by Country (Unit: tonne) Exporters 2012 2013 2014 2015 2016 World 1,380,825 1,610,552 2,733,039 2,347,580 2,357,147 Canada 403,385 449,826 1,410,442 1,174,669 1,020,046 USA 158,019 219,625 303,010 481,706 197,731 Mexico 115,500 60,500 125,080 25,500 195,974 Greece 159,656 145,544 268,804 130,769 146,944 France 153,574 348,717 364,753 118,865 129,901 Australia 241,702 223,668 102,924 91,247 128,412 Kazakhstan 29,507 2,994 61,664 109,684 Russia 18,667 3,297 12,360 67,711 Argentina 31,000 59,500 Croatia 518 250 354 47,989 250,000 200,000 150,000 100,000 50,000 Italy Durum Wheat Import by Country (Unit : tonne) World Mexico Australia Kazakhstan Russian Federation Argentina Croatia 300,000-2012 2013 2014 2015 2016 3,000,000 2,500,000 2,000,000 1,500,000 1,000,000 500,000 - Italy Durum Wheat Import (Imported unit value in AUD/tonne) Exporters 2012 2013 2014 2015 2016 Ave. USA 433 441 478 574 532 492 Australia 388 426 421 729 474 488 Kazakhstan 372 575 538 367 463 Argentina 510 369 440 Russia 357 504 510 347 430 World 378 406 427 524 397 426 Canada 361 396 414 491 388 410 France 373 368 405 464 379 398 Mexico 351 375 378 453 419 395 Greece 344 350 413 480 326 383 Croatia 295 235 259 222 253 Threats: Is Australia losing market share in Italy? Is this due to any supply issue in Australia? Are other countries expanding their market share? Are these countries low cost competitors? Is it critical for Australia to continue to improve the quality as our advantage to compete with those low cost producing countries in the global competition?

X 1,000 tonnes x 1,000 tonnes x 1,000 tonnes Reasons for Project Durum wheat for Japan 40,000 35,000 30,000 25,000 20,000 15,000 10,000 5,000 - Australian Wheat Production by State (ABARES Australian crop report in Sept 2017) 03/04 04/05 05/06 06/07 07/08 08/09 09/10 10/11 11/12 12/13 13/14 14/15 15/16 16/17s 17/18f QLD 1,150 1,308 1,231 777 954 2,016 1,346 1,524 1,886 1,614 1,036 987 1,316 1,800 900 VIC 3,350 1,943 2,972 879 1,995 1,756 2,995 4,412 3,943 3,423 3,396 2,631 1,815 5,200 3,500 SA 3,800 2,688 3,863 1,446 2,296 2,376 4,001 5,949 4,525 3,679 4,254 4,602 3,679 6,600 3,770 NSW 6,730 7,835 7,828 2,568 2,477 6,963 5,350 10,488 8,473 7,365 6,596 6,654 6,898 11,375 6,336 WA 10,650 8,797 9,436 5,184 5,820 8,274 8,114 5,005 11,045 6,744 9,977 8,824 8,511 10,000 7,075 TOTAL 25,680 22,571 25,330 10,854 13,542 21,385 21,806 27,378 29,872 22,825 25,259 23,742 22,272 35,009 21,614 40,000 35,000 30,000 25,000 20,000 15,000 10,000 5,000-40,000 35,000 30,000 25,000 20,000 15,000 10,000 5,000 Australian wheat production by state (by Grain information co.) - 07-08 08-09 09-10 10-11 11-12 12-13 13-14 14-15 15-16 16-17 17-18 Qld 883 2,003 1,341 1,522 1,481 1,630 1,091 1,062 1,532 1,882 852 NSW 2,470 6,903 5,285 10,455 8,495 7,300 6,550 6,300 6,900 10,600 4,550 Vic 1,983 1,747 2,975 4,400 3,453 3,407 3,350 2,750 2,080 4,775 3,550 SA 2,282 2,369 3,999 5,947 4,273 3,700 4,360 5,250 4,300 6,625 3,575 WA 5,761 8,254 8,099 5,448 11,843 6,650 10,205 9,300 9,105 9,905 7,455 Aust 13,379 21,276 21,700 27,772 29,545 22,687 25,556 24,662 23,917 33,787 19,982

Reasons for Project Durum wheat for Japan The strategic development of an export durum wheat trade may help to enhance the competitiveness and export opportunities of APH, APW and AH in the eastern states by providing more opportunities for Japanese buyers to make full vessels of combination cargos. New MAFF SBS category 3 (SBS3) could provide Australian shippers with a business opportunity Every flour milling company is after strong, distinctive characteristic wheat in quality to make a difference in a very intensive market. SBS 3 will give flour millers more option to import any grade/variety from any country in the world, hoping that this will stimulate their interest in strong characteristic/distinctive variety in all grades of wheats, not only noodle (e.g. strong characteristic noodle variety to blend with existing one or use for premium udon for product differentiation), but also bread wheat. Japanese trading companies regard this tender system as a great business opportunity and are expecting that this quota will be expanded, if the system can work for their industry. Key performance for the success is for shipper/importer(registered trading house) to meet the requirements from users(flour millers) in quality and price. We should think that this will be a significant turning point for the import system of wheat to Japan. New introduction of MAFF SBS Category 3 Quota of 200,000 tonnes of wheat per year The first tender of this SBS 3 has just been commenced in October 2017, once a month until a quota of 200,000 tonnes is filled up. Any wheat class/grade from any origin in the world is OK to take part in the SBS tender (practically any variety of wheat is OK) In bulk or in container This category has been introduced to strengthen the international competitiveness of flour millers under Strengthening and Support Act of Japanese agriculture which has been submitted to Parliament by MAFF. Small and medium sized flour millers will need to make a group alliance to be able to import the wheat in bulk vessel.

Reasons for Project Durum wheat for Japan About SBS (SIMULTANEOUS BUY AND SELL) TENDER SYSTEM SBS is a system that links suppliers and users more closely, creating a flexible mechanism for importing certain wheat and barley classes (grades), quality, destination (ports) and shipment timing. Under the SBS system, the importer and the end-user work together to bid their prices to Japan s MAFF simultaneously. The importer bids their selling price (CIF in Japanese yen) to MAFF and the user bids their buying price from MAFF. MAFF subsequently awards the tender to the companies who provide the highest margin to MAFF. Unlike the MAFF general tender which currently applies for Western Australian ASW noodle blend imports, the SBS tender allows customers (Japanese trading houses and flour millers) to interact directly with growers and suppliers. Food wheat imported into Japan under the MAFF General and SBS tender systems Tender system Transportation Origin country Class(Protein level on FOB basis) General Tender Bulk Vessel US/Canada/Australia US (US No.2 spec or better): WW (max 10.5%), HRW (min 11.7%), DNS (min 14%) Canada: 1CW (min 13%, CAN) Australia: ASW blend (10-11%) SBS1 Bulk Vessel US/Canada/Australia Australia (shifted from General to SBS in April 2007): APH (min 13%), (minimum 1000 tonnes) Canada (shifted from General to SBS in April 2007): DRM (No.2 or better, min 13%) US or Australian DRM is applicable Australia (from 2015): AH and APW SBS2 Container Any country Classes other than those imported by MAFF through General tender (minimum 17 tonnes) Canadian DRM and APH are applicable Organic wheat SBS3 Bulk or Container Any country Any wheat class/grade from any origin in the world is OK (from Oct 2017)

Stage 1: Evaluation results by Japanese flour mills Quality requirements of durum wheat for Japanese pasta market: Texture is most important for Japanese market Texture of end product (pasta) should be firm enough, good texture (good crispy texture). High protein is required because pasta firmness (sensory) is correlated with protein content of semolina and pasta firmness. Both colour and brightness for durum is important, firmness and elasticity as well as stickiness are also important. *Low ash and high yellow pigment sensory colour of Pasta is highly correlated with ash content and yellow pigment of Pasta. Solid albumen and high extract rate (high production of semolina) are required. (Note) *Ash content of ADR samples was higher than CAD (Canadian durum wheat) samples in most cases. But, it is apparent ADR has an advantage (brighter with deep yellow) in colour over CAD. Japanese pasta SAN REMO

Sensory Evaluation Results by Japanese flour millers: Flour Miller A

Sensory Evaluation Results by Japanese flour millers: Flour Miller B Flour Miller B 2015 Crop Colour Firmness Elasticity Mouthfeel at Bite Stickiness Total Point Protein in Grain % CAD (control) 3.0 3.0 3.0 3.0 3.0 3.0 14.0 Lillaroi 4.1 2.6 2.9 2.9 3.2 2.8 13.2 Caparoi 3.9 2.9 2.7 2.7 3.3 2.8 13.0 Jandaroi 3.7 2.8 2.8 2.6 3.3 2.7 13.5 DBA Aurora 3.4 2.1 2.3 2.5 3.5 2.2 12.4 WID 802 3.3 2.2 2.4 2.6 3.5 2.3 12.1 Summary of 2015 Crop tests 11.0%mb Totally, there were no ADR samples better than CAD in this evaluation. CAD>Lillaroi=Caparoi >=Jandaroi>WID802>=DBA Aurora Pasta made from ADR showed more yellowness compared to the CAD not only by Minolta, but also visual appearance. Especially Lillaroi showed bright and strong yellow Easting quality of ADR was softer and sticker than CAD. Especially WED802 and DBA Aurora were remarkably lower due to their lower protein content. Other three varieties also showed poorer firmness, less elasticity and more stickiness compared to CAD Protein content of CAD was 12.9% mad it was higher than ADR in this evaluation. If protein content of CAD and ADR was the same level, the quality difference might have decreased 2016 Crop Colour Firmness Elasticity Mouthfeel at Bite Stickiness Total Point Protein in Grain % CAD (control) 3.0 3.0 3.0 3.0 3.0 3.0 13.7 280913 3.4 3.2 3.3 2.6 3.2 3.2 14.2 190873 3.8 3.5 3.4 2.8 3.2 3.4 13.5 Jandaroi 3.3 2.9 3.2 2.7 3.2 2.9 14.1 Lillaroi 3.7 2.8 2.7 3.4 2.8 2.9 13.8 DBA Aurora 3.3 2.6 2.7 2.7 3.5 2.5 13.1 Summary of 2016 Crop tests 11.0%mb Eating quality of ADR samples were better than last year's samples due to their higher protein contents. 190873 showed harder and more elastic texture compared to CAD. 280913 also showed equal or slightly better texture compared to CAD. Other three varieties showed slightly poorer firmness, less elasticity and more stickiness compared to CAD. Totally, ranking was as follows. 190873>280913>=CAD>Lillaroi=Jandaroi>DBA Aurora Pasta made from ADR showed more yellowness compared to CAD not only Minolta, but also visual appearance. Especially 190873 and Lillaroi showed bright and strong yellow. This year's results were different from last year's one due to their higher protein contents. It is important for the evaluation compared to CAD to use the samples that have the same protein level to the CAD.

Sensory Evaluation Results by Japanese flour millers: Flour Miller C Flour Miller C Australian durum wheat (as compared to Canadian WAD): Higher in ash and crude protein content Lower in flour yield (B flour + C flour) - It can be thought that endosperm of ADR is harder. Much semolina was taken out after going through C1(R1) and C2(R2) rollers, but the semolina was not able to pass through the sieve. Colour: bright and deep yellow, especially Lillaroi, 280913 and 190873 Texture: generally strong texture. Jandaroi: totally firm and elastic, others have viscoelastic texture. All of them could be used to improve the existing Canadian WAD because of good colour. Control. Australian Durum Variety Name Canadian WAD Jandaroi Lillaroi 280913 190873 Second Processing Mixing TM flour:100% addition of water 31%(has an adjustment for addition of water) Test Raw pasta *Noodle condition slightly dry slightly wet slightly wet slightly wet slightly wet Colour Sensory (eating) transparent creamy colour a bit yellower than the control deep yellow and slightly reddish bright deeper yellow and slightly reddish bright deep yellow, but little reddish (Cooking time) 2 min 2 min 2 min 2 min 2 min adequate firmness firm totally and strong texture, a bit strong soft and viscoelastic and viscoelastic elastic with firm viscoelastic texture texture, texture texture viscoelastic Dried Pasta *Noodle hanging test while drying process nothing nothing nothing a little a little thickness (mm) 1.55 1.58 1.56 1.53 1.55 Colour a bit creamy a bit brighter than bright and bright and deep bright and deeper the control, a bit deeper yellow yellow yellow than Lillaroi creamy than Lillaroi (cooking time) 6 min 15 sec 6 min 15 sec 6 min 45 sec 6 min 45 sec 6 min 45 sec Sensory (eating) adequate firmness and viscoelastic texture, crunchy texture firm totally and elastic with firm texture a bit firm and more firmness in core part a bit strong texture, viscoelastic soft and viscoelastic

Stage 1: Highlights of the quality evaluation ADR definitely has an advantage in colour (brighter than CAD). All of the samples could be used to improve the existing CAD because of good colour (by Flour Miller C). Flour Miller B: Eating quality of ADR samples were better than last year's samples due to their higher protein contents. 190873 showed harder and more elastic texture as compared to CAD. 280913 also showed equal or slightly better texture as compared to CAD. Total ranking on 2016/17 crop is as follows. 190873 (DBA Bindaroi) > 280913 (DBA Vittaroi) >= CAD > Lillaroi = Jandaroi > DBA Aurora

Australian Durum wheat (ADR) production It s difficult to obtain any official durum wheat production data because of deregulation in Australian grain industry. Peak production was nearly 800,000 tonnes in 2001/02. In recent years, 300,000 to a bit over 400,000 tonnes of ADR is being produced. NSW and SA continue to be major durum producing states. 2017 durum area could be larger than 2015 and 2016 although severe winter and spring drought in Northern NSW in 2017 has restricted production. Rain fed durum is spreading into new areas in NSW, Vic and SA. There are crops in WNSW (around Parkes, Gilgandra and Coonamble) SNSW (Bribbaree) and Victoria (Horsham, Kaniva and Elmore). Estimated Durum wheat production (unit: tonne) State 2012-13 2013-14 2014-15 2015-16 2016/17 2017-18 5 Year Ave QLD 1,306 8,769 9,844 29,138 51,184 45,305 28,848 NSW 231,207 128,478 161,719 106,323 248,037 204,710 169,853 VIC 24,750 SA 184,078 289,164 189,256 154,055 217,600 179,310 205,877 WA National 416,592 426,412 360,819 289,515 541,571 429,324 409,528 Source: Australian Crop Forecasters (ACF)

Australian Durum wheat (ADR) production ADR is well suited to the production of high quality pasta products and ADR quality is regarded by Italian millers/producers as one of the best in the world. But, Since 2001/02 the production has declined due to a number of factors including; Unfavourable seasons Disease (Crown rot) this disease can cause significant yield reduction (>50%) and all varieties are susceptible* Lower prices (compared to bread wheat) *Current durum wheat varieties commercially released in Australia don t have resistance to this disease. However, Durum Breeding Australia in collaboration with SARDI (H Wallwork) and Univ. Southern Qld (A Martin) are working to reduce the levels of susceptibility through improved variety release.

Australian Durum wheat (ADR) production DBA advises that there is still potential to increase the amount of durum grown in both dryland and under irrigation. Generally yield of durum wheat is similar to some of the best APH bread wheat across the country. Yield of DBA Aurora is an excellent example of how the yield gap has been narrowed between durum and bread wheat. Durum yield under irrigation in Southern and Northern NSW averages 8-10 tonnes per ha and high protein can still be achieved. Durum is profitable for those farmers growing under irrigation and the higher yield of irrigated durum production offsets the water cost. The domestic requirement is estimated at around 200-300,000 tonnes of durum. San Remo, in Adelaide, is the largest user (pasta maker) and it secures their volume through area-based contracts which are initiated approximately February/March every season in SA. San Remo also have area-based contracts in NSW (both irrigated and dryland), however at this stage these relationships are with specific growers and organisations.

Australian Durum wheat (ADR) production DBA is the sole provider of new durum varieties in Australia. NSW (year of release) Jandaroi (2009), Caparoi (2010), EGA Bellaroi, DBA Lillaroi (2015), 190873 (DBA Bindaroi, 2017) and 280913 (DBA Vittaroi, 2017) SA (year of release) Hyperno, Saintly, Tjilkuri (2010), Yawa (2012), WID802 (2012), DBA Aurora (2014) Major varieties in irrigated area including MIA: EGA Bellaroi remains the major variety for Griffith and MIA although there are some irrigated crops of DBA Aurora. DBA Vittaroi is expected to replace both varieties within a few years. NSW: Jandaroi (2009), Caparoi (2010), EGA Bellaroi, DBA Lillaroi (2015), 190873 (DBA Bindaroi, 2017) and 280913 (DBA Vittaroi, 2017) SA: Hyperno, Saintly, Tjilkuri (2010), Yawa (2012), WID802 (2012), DBA Aurora (2014) Major Varieties in ADR (% of Receivals) Variety 2011-12 2012-13 2013-14 2014-15 2015-16 2016-17 Caparoi 8 16 13 21 14 30 EGA Bellaroi 34 17 17 14 21 11 Jandaroi 30 63 51 48 48 38 Wollaroi 23 14 18 16 16 6 DBA Lillaroi 13 Source: GrainCorp Australian Crop Report.

Industry and Research Links with Tamworth Quality Group DBA Markers Cereal Quality DBA Breeding-S DBA Breeding-N

Key breeding objectives for DBA Increase grain yield Yield gain ~0.04t/ha/year (NVT)-so a challenge Improve CR tolerance (VS---S) Maintain and improve quality for overseas competitiveness Remain competitive against local bread wheat Develop varieties that are heat and drought tolerant

Some considerations Although the quality of new ADR varieties (2016/17 crop) were considered favourable when compared to Canadian material a step change within Australia is likely to be required to encourage Japanese traders/durum product manufacturers to shift from their current source (Canadian durum wheat). This change would require stability in supply, good quality and a competitive price. Unfortunately everybody has a perception that wheat (price and production) in Eastern states, Australia swings up and down wildly. Stability in supply, quality and price competitiveness are essential for Japanese market How we can establish a mechanism to increase the production One thing we learned from the Stage 1, it tends to be more difficult/conservative for bigger flour millers to shift from their current origination (Canadian durum wheat: CAD) to another, even though their quality team evaluated the quality of new ADR varieties (2016/17 crop) were better than CAD. It might be more practical to target smaller flour millers for business development opportunities.

Some considerations Is there value in diversifying Australian durum export markets? If so, is Japan a sensible target? If not what alternatives? Are there any pre-competitive mechanisms that Australian industry as a whole could build to increase the medium term opportunity to increase the production and supply durum wheat to Japan/other markets? Might it be essential to promote quality advantage of Australian durum wheat as an industry?

Some considerations Examples: Information - general crop production data by area (broad acre and irrigated area), crop quality reporting Samples - ongoing sample supply, for quality evaluation and two- way quality information exchange Hosting of durum export market stakeholders to Australia to view production etc ($ to be shared across industry) New supply chain pathways Others?

Thank you very much Matt Yamamoto matt.yamamoto@aegic.org.au Economic analysis by AEGIC: http://aegic.org.au/publications/economics-and-business-analysis/