What is Australian White Wheat (AWW)?
Australian White Wheat (AWW) is a new milling wheat class that is suitable for Instant Noodle and General-Purpose Flour markets. AWW maintains the core quality characteristics of Australian hard wheat, being white, hard and sound with superior milling extraction and flour colour.
Why do we need an AWW classification?
Over the last 10 seasons, the largest export customer for Australian Wheat has been Indonesia, followed by other Southeast Asian countries such as Vietnam, The Philippines, Malaysia and Thailand. Instant noodles are a major use of wheat flour in these markets. The AWW classification is designed to specifically meet the needs of this important market.
Most Australian wheat currently supplied to the instant noodle market is either ASW, or APW. These wheats are not bred for this purpose and are largely downgraded AH or APH classed varieties which are bred to have the additional characteristics required for other higher value markets such as bread baking and fresh noodles. This means a significant portion of the investment by breeders and farmers to pursue increased quality is wasted and the opportunity for potential yield increase is foregone.
Why introduce AWW now?
Recent seasons have seen lower cost wheat producers (Black Sea and Argentina) competing more strongly in the Southeast Asian market, particularly for share of the instant noodle and general-purpose flour markets. The development of AWW is an important part of the strategy to protect our current markets and provide greater choice for breeders, growers and the trade.
WQA has been working through changes to the classification system in the more price sensitive classes (APW and ASW) since 2016 and has been in discussions with the Wheat Classification Council and with wheat breeders, growers and traders to develop an appropriate solution.
What are the main value drivers for the AWW Class?
It is estimated1 that by 2031 (in 10 years’ time) the cumulative impact of the AWW class on yield and area will be 1.86MT additional crop size and $510M increased value per season. This assumes that AWW grows to 10% of the Australian crop which is less than half the existing market size conservatively estimated2 at 5-7M T (Instant Noodle and GP or Retail).
What does AWW mean for wheat breeders?
The AWW classification provides an opportunity for breeders to develop new varieties that meet specific market needs for instant noodle and general-purpose flour markets. This market is less demanding and requires less quality testing, thus allowing a wider range of quality types to meet the requirement. This bigger target allows for value creation through increased yield, potential broader environmental adaption and reduced risk.
Because the traits included in the AWW requirements are less influenced by environmental
variations compared to some others, there is an opportunity to reduce the number of seasons of data required to achieve classification, faster cycle time and shorter time to market is also value generating.
What does AWW mean for growers?
Planting wheat varieties that are fit for purpose will mean a better return on investment for growers and greater profitability. Over time, AWW varieties are expected to have higher yields (up to 8-10% more) than APH and AH varieties while still retaining acceptable milling quality.
As this is achieved through multiple successive breeding cycles the gains in yield will be steady over 3 or 4 release cycles, so it is not expected that the steady state will be reached in less than 15+ years.
AWW varieties will also be bred to suit specific climatic conditions such as high rainfall areas and the sub tropics, enabling growers in these regions to expand their sowing options.
What does AWW mean for the domestic trade?
The domestic market — stock feed, milling and industrial — is the largest market for Australian wheat. The new AWW classification will be suitable for use in feed and industrial markets, enabling other wheats (ASW, APW or AH) to be preserved for higher value export as well as domestic milling markets. This means increased supply and increased revenue in the supply chain.
How will AWW be graded and cascade into other grades?
AWW is a hard milling class which sits below ASW. It is therefore expected that as GTA progresses the grading assessment, that AWW will cascade to GP and Feed and potentially to specialty off grades. WQA is working with GTA to assist with progressing grading decisions.
Will AWW deliver value in Feed markets?
AWW is a hard milling class not explicitly targeted as Feed markets either domestic or export, however these markets are already large and forecast to become larger. The addition of a milling class with scope for improved yield and adaptation to a wider range of environments will improve the competitiveness of Australian Wheat in both domestic and export feed markets.
Is there a risk of damage to the broader brand reputation of Australian Wheat?
AWW is a separate class and grade of wheat and should not impact the quality of existing
classes/grades. AWW is targeted to be fit for purpose for milling, instant noodle and GP flours and provided this proposition is communicated effectively to markets, the risk of brand damage is negligible.
How will AWW compare competitor origins?
AWW will show superior milling extraction, flour colour and starch properties to Black Sea origin milling grades. Based on the benchmarking work available, AWW is around mid-way between current AH and Black Sea wheats on an ash adjusted milling extraction. Flour colour is likewise halfway between current max yellowness for AH and the known problem variety Krichauff. Testing for dough properties and end products, both baking and noodle, are not in the AWW requirements.
No protein minimum specification has been set for AWW as a class, however it should not be implied that AWW will only be a low protein class as there are markets for AWW at a range of protein from 13+% to 10% and below. Opportunities to capture improved value in instant noodle and GP flour markets requiring a range of protein can be accessed with AWW.
When will AWW be available?
Following approval AWW will be included in the 2021 Classification Guidelines, which means applications can be considered from 2022. It is expected that AWW will then be included in the Master List and the Wheat Standards in the years following. It is not expected that AWW will be available in commercial volumes for several seasons.