April 1998
Wheat 
World News
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Prairie Grains is the
official publication of
the Minnesota
Association of
Wheat Growers,
North Dakota Grain
Growers Association,
South Dakota Wheat,
Inc., and the
Minnesota Barley
Growers Association.
Current market analysis indicates the world wheat market could reach 150 million metric tons (MMT) by the year 2025. This compares to the current market level of approximately 100 MMT, according to Dan Amstutz, president and CEO of the North American Export Grain Association (NAEGA). Factors behind the increase include population increases and growing economies. He says the current "Asian Flu" economic crisis is more of a "hiccup" than a long-term problem and that wheat imports will likely be less affected than other higher-priced food items that aren't viewed as a staple item.
He cites Mexico as an example of a country that survived a similar economic crisis and is now doing quite well (and also importing large amounts of U.S. wheat).
A look at USW market share
In terms of market share, in recent years the U.S. has enjoyed a 63% market share in the Mexico/Central America/Caribbean region, a 54% market share in North Asia, and a 40.5% market share in South Asia, excluding India. Last year, the U.S. had a 53% market share in Ecuador, a 64.2% market share in Korea, and a 91% market share in Taiwan.
Wheat Quality Committee focusing on priorities
U.S. Wheat Associates' Wheat Quality Committee is currently focusing on two quality issue priorities identified in the USW strategic plan, according to committee chair, Bob Zabel of South Dakota:
1) Developing a program proposal that would provide overseas customer analysis of major U.S. wheat varieties, the goal being to provide foreign milling and end-use analysis data back to the U.S. industry, especially breeding programs and producers.
2) Wheat quality parameters, established by wheat class groups to review wheat quality varietal release criteria and identify class-specific wheat quality issues.
The committee plans to work with the Wheat Quality Council on both of these projects. Paul Dickerson, USW Vice President of Overseas Operations, says that the worldwide trend to privatize wheat imports is creating increased demand and interest in wheat quality. Given this and other factors, Dickerson said he can't remember a time when the role and efforts of USW were more important.
Meetings Work to Resolve U.S. Export Issues to India
The likelihood of Indian purchases of U.S. wheat is greater following a recent series of meetings involving government officials from both countries. In February, USDA officials held a series of productive meetings in India with officials from the Government of India's Ministries of Agriculture, Food and Health and from the Food Corporation of India and State Trading Corporation.
The meetings resulted in considerable progress in resolving phytosanitary-related certification issues and should allow future exports of U.S. wheat to India. These issues were likely part of the reason, along with price issues, that India did not purchase any U.S. wheat in 1997, the last time it purchased wheat from outside sources. In late February, India issued an import tender for 200,000 tons of wheat, but could eventually import considerably more wheat.
Last spring, USW and USDA representatives met with government officials in India as part of the process to resolve the certification issues. USW's office in New Delhi, India, also has worked to settle the issue.
USDA Team Visits Korea, Indonesia
A team of USDA government officials traveled to Korea earlier this year to assess the economic situation there and to explain the GSM credit program recently made available to Korea for the purchase of agricultural goods. The team met with government officials, members of the trade and USDA cooperators to discuss implementation of the $1 billion GSM program in Korea. A GSM Seminar was held for 100 agricultural commodity importers, bankers and news journalists to explain the program.
The team also traveled to Indonesia to survey economic conditions. There they met with USW Vice President for South Asia Mark Samson, governmental entities and flour milling company executives. Indonesia was expected to import four million metric tons of wheat in the current marketing year, however, without credit or other import assistance programs, this level will likely not be met.
New Flour Mill Opens in Vietnam
The grand opening of Vimaflour Ltd in Cailan, Vietnam, was held in February. The new 450- ton-per-day mill is located in northern Vietnam and will provide flour to the Hanoi region. The grand opening was attended by USW representatives and more than 450 government officials, joint venture partners and customers of the recently completed milling complex. Although no U.S. wheat has been purchased by Vimaflour Ltd, USW obtained a commitment from mill management for their staff to participate in USW market development programs geared toward expanding knowledge of U.S. wheat classes.
Last fall, Vietnam made its first purchase of U.S. wheat, 5,000 tons each of hard red winter and hard red spring, following the lifting of the U.S. trade embargo in 1994.
American Quality Wheat Seal Promotion Continues in Egypt
USW/Cairo continued expanding the retail component of the "American Quality Wheat" seal campaign during the first two months of 1998. Retail promotions were conducted in six leading supermarkets in Cairo, as well as in five sporting clubs (similar to western-style country clubs). Representatives involved in the promotions conducted an informal survey of consumers regarding the seal, finding that most consumers were aware of the wheat seal and its meaning and were interested in purchasing products made from American wheat.
A new television commercial also is being produced as part of the campaign. Since the campaign began several years ago, USW/Cairo has produced and aired four commercials.
Better buns from U.S. wheat
Two four-person teams from Korea recently completed research projects at the Wheat Marketing Center in Portland, Ore. One team conducted hamburger bun flour development research comparing flour samples milled from U.S. wheat and from Canadian wheat. This was the first such Korean activity to research hamburger bun quality characteristics using U.S. wheat flour samples.
The team evaluated hamburger bun quality characteristics, comparing Canadian wheat flour samples to several U.S. wheat flour samples produced by blending various quantities and protein levels of hard red winter and dark northern spring. The research indicated better baking quality attributes from the blended U.S. samples compared to the Canadian samples.
Spring wheat varieties to be tested in Japan
Two leading Japanese milling companies will again participate in a hard red spring (HRS) wheat variety testing program conducted by the North Dakota Wheat Commission that involves testing the major HRS varieties grown in North Dakota. This year's program covers the 12 major HRS varieties produced in North Dakota during 1997. In addition to the two Japanese mills, samples will be tested by North Dakota State University and ADM or ConAgra. The main factors the varieties will be tested for include flour ash, dough strength and stability, dough absorption, bake mix times, bake absorption, loaf volume and overall bake quality.
Organic products made from U.S. flour successful in Japan
A major Japanese baking company is expanding its sales of organic bread products, following a successful test marketing of the products last year. The company is marketing about five different products with monthly sales of more than $600,000. The organic flour used to make these products is being imported from the U.S.
Flour Donation to Cuba
USW and the Kansas Wheat Commission recently donated 22,000 pounds of flour to Cuba. The donation was made through a Catholic church relief program. Although commercial exports of food and other products from the U.S. to Cuba are banned, some donations for humanitarian purposes are allowed. Several bills in Congress are currently pending that would allow commercial U.S. exports of food to Cuba. Mitch Skalicky, USW vice president for the Mexican-Central American-Caribbean Region, traveled to Cuba to participate in the flour donation, during which he met with various government officials regarding future donations.
Chinese millers are importing more better-quality U.S. wheat (including dark northern spring) for milling the required quality flour for their end users, especially bakers, noodle manufacturers and processors of frozen Chinese wheat flour foods. That's according to Ronald Lu, technical marketing specialist based in Taiwan. Technical information for Chinese millers, to help them understand the quality and value of U.S. wheat for their flour quality, is as essential as the technical programs for assisting them to use our wheat properly, says Lu. (file photo) n