With assistance from the GRDC members of the WA Grains Group travelled to China in September to secure direct access to Chinese wheat markets and gain a greater understanding of wheat end-users in China for the purpose of value adding our grain products and better meeting market specifications in the process.
The WA Grains Group travelled with a technical team from Murdoch University. The Technical team consisted of members of the staff from the Australia China Centre for Wheat Improvement (ACCWI), Professor Rudi Appels, Professor Wujun Ma, and Hollie Webster Wheat Research Fellow BRur.Sc(Hons).
• Our first point of call was at the China Academy of Agricultural Science (CAAS) where Professor Ma had studied as a student. It is located in Beijing, however when he was a student 20 years ago it was surrounded by wheat fields. CAAS houses the China arm of ACCWI, while we were there they pointed out the long involvement of the Academy with world wide collaboration with those involved in CIMMYT (International Maize and Wheat Improvement Centre) (Spanish Acronym). They work on Variety development such as processing quality, disease resistance, and yield potential. In more recent times they have applied themselves to Molecular Marker development application along with International networking, training and workshops. The other International agencies that they collaborate with include USDA centre for Wheat Quality and Pathology, Sino Australian China Centre for Wheat Improvement (Murdoch) and Sino-Japan Joint Noodle Quality Laboratories.
We went to the National Key Facility for Crop Gene Resources and Genetic Improvement where some of the transgenic pre-breeding is done for new varieties.
(Yield is 6-7 t, diseases and pests are increasing, seeding has moved back a week due to climate change, up to 10 varieties released every year, China produces about 120 million t of wheat, commercial companies are contracted to release varieties and royalties come back to CAAS (professors help with extension by attending field days), average farm is 1 ha, labour expensive, becoming more mechanised, contract harvesters about $150/ha, Government wants farmers to buy their seed every year, hybrid wheats have been worked on since 1960 but not very successful, 1t of wheat is about $400 US to the farmer, the farmer is subsidised $217/t)
• Guchuan Milling Company they own 9 milling companies 6 of which are in Beijing processing 4200T/day they import 800,000T of wheat from Britain, Switzerland, Japan and Italy, the majority of the imported wheat is from Canada and USA. 10 years ago they were sourcing as much as 30% of their wheat from Australia. However the quality of flour is reducing and becoming yellower. Bleaching of flour was outlawed over two years ago. The dough is not strong and is only good for noodles and steamed bread but Chinese wheat is cheaper. They no longer source it from Australia as there is no information flow on quality or quantity, whereas this is freely available from USA and Canada and the quality is more uniform.
When we asked what they would like from Western Australian wheat varieties, they want a whiter flour for noodles and steamed bread.
The technical team noticed that a piece of equipment that they do not use in Australia (an Alveogragh) was being used to determine one of the quality attributes. The farmers noticed the Foss machine and the falling numbers machine, what falling numbers to you want? 180!
Mongolian Wheat is the best wheat and they pay more for it, it is so white it is almost translucent. New flour mills are being built in the rural areas closer to the farmers. Wheat production is increasing at about 10% annually and the mill is working at about 67% capacity. They would like to deal directly with the farmers to import the wheat they require. Their flour goes to Steamed bread 30%, Noodles 30%, Dumplings 15%, Deep fried 5%, Flat breads 5%, Bread 5%, Cakes 5%, Flour 5%. Wheat flour for speciality products is increasing and they can therefore afford to buy more from USA and Canada as speciality products demand higher prices. Australian Wheat has a low ash content which is good. They do not export their products as there is enough internal demand. They lose 0.5% in cleaning the wheat. Each storage silo has different grain and it is blended according to the required product line.
• China National Cereals, Oils and Foodstuffs Corporation (COFCO) Wheat Division. This was very interesting as there was a shop selling and displaying all of the product range that COFCO is involved in, which is extremely diverse. COFCO continues to buy wheat for China through trading companies. They would like to do business with farmers from overseas but only through a trading company. Since the Australian market has been deregulated the quality of wheat has decreased. They are interested in niche markets but at the correct price and quality. ASW wheat is the most popular as it is cheaper. If we as farmers want to sell in China we are best to go direct to the flour mills. In 2012 China imported Australian Wheat as it was cheaper, this year more US and Canadian Wheat, next season they expect Australian wheat to be cheaper.
• Academy Of State Administration of Grain – Grain Storage Division. In 2012 the President of the Academy of State Administration of Grain visited Murdoch and signed a biosecurity agreement, he also visited Lake Grace to view grain being stored on farm in Nitrogen.
This Academy does a lot of analysis of Grain Storage over various lengths of time, in high and low temperature (using a Mixolab), microbial activity under the epidermis (using a biohazard detector –measuring the CO2 being given off), and using various atmospheres to remove insects (with the focus on non-chemical control).
They also measure various wheat qualities such as gluten, protein, texture, dough consistency, etc. We noticed the Alveogragh was being used here as well. They profile the end products, such as noodles on hardness, colour and crumb textures. The national and international standards are compared on Linear Regression Scores.
When asked about the colour of flour they said they are trying to encourage the public to look for a bright colour not necessarily white as this is difficult to get (opportunity?).
The Academy collects the data of grain production, use and quality across all provinces of China. They set the wheat standards for China and allocate export quotas.
While we were there a presentation was given to them by WA Grains Group, on the use of Nitrogen to store grain on farm in Western Australia, this was well received.
• Henan Academy of Agricultural Science (HAAS) We were joined by Dr Anna Somerville Counsellor Agriculture (Policy) Australian Embassy Beijing. We visited the wheat breeding division of HAAS where wheat is bred conventionally as well as using molecular markers, transgenics and is the only facility licenced for GMO’s. Research is being done on mapping profiles of powdery mildew resistant genes, stress tolerance transgenics, photosynthesis efficiency and nutrient utilisation efficiency. They provide a wide range of services. They have had two of the wheat varieties receive awards for being sown into more than 1.5 Million hectares. Professors and breeders spend a lot of time in the country showing farmers the new and better varieties. (the extension that Australia is lacking)
All of the directors of HAAS have been to Australia and learned a lot. They hope that the exchange of information will be beneficial for everyone. They do a lot of laboratory work testing for quality, gluten etc. There is a focus on germ plazm, new gene discovery and transformation. They are mainly focused on yield but it has to be of improved quality (yield in China has increased by 5 – 20%). Henan is the most populated province, has the most farmers and produces the most amount of wheat.
• China National Cereals, Oils and Foodstuffs Corporation (COFCO) Henan This flour mill was most impressive and is in it’s first year of production, taking only 18 months from inception to completion was very impressive. The facility was built in this location because it is close to farmers, (all wheat is sourced within 150 km) has good road access and the train extension will be going past. They have the capacity to store 10,000 t of wheat on site and other grains up to 50,000 t. The total storage capacity is 250.000 t with the before and after product. The mill capacity is 200 t /day, 100 t high strength, 40 t medium strength and 60 t weak strength. 20 t/day of noodles. They will produce feed products in the near future from the by-products of the grain, (that part is not yet operational) currently it is going elsewhere to be made into stock feed. When they get to full production they will produce 40,000 t of noodles /yr and 300,000 t of feed products. COFCO has 4 mills in the province with two in the capital, ZhengZhou.
Currently the wheat comes from National Storage Facilities and they have 3 preferred Chinese Varieties as the baking quality is higher than imported wheat. They provide seed to farmers so they grow the wheat they want. There is a new trend in Chinese Restaurants to produce the noodle on site and not use instant, this needs a new quality (stretchy), this factory produces 60% of the flour required for this product.
The mill has all of the latest technology, two computerised ventilation systems working in conjunction with each other. They have their storage silos (300t each) set up to store product under Nitrogen but not using it yet. One is set up for aeration. All of the milling equipment was from Switzerland. They have a unique cleaning machine based on grain colour. Their laboratories were all very large and not all have been fully equipped (but we did notice the Alveogragh). It takes 3 – 4 days to get from silo to bagged end product.
The preferred imported wheat is Soft red winter wheat from USA, No1 white from Canada and ASW from Australia. Australian wheat has high flour yield, low ash and good colour (used for noodle and dumpling). They like to import very high gluten strength and very low gluten strength (Chinese wheat is medium strength). When asked if they used Mongolian wheat – this is milled by the COFCO mill in Mongolia. What is your wheat import quota? 10,000 t. How consistent is ASW wheat from Australia? Hard to tell as it is their first year. What falling numbers are required? 250 – 350, the COFCO standard is higher than 250.
• Henan Research and Development Base for Modern Agriculture This is the equivalent of the research arm of Henan Academy of Agricultural Science (HAAS). This research facility is located on 400 ha and 1.2 Billion Yuan (about 240 Million dollars) has been invested in the centre. The entrance statements were buildings designed on historical farm implements and included a monument to the god of agriculture, the power for the facility is provided by solar, wind and methane, the colours represented the five soil types of China. The water from the 23 ha lake is used in irrigation, the excess water is recovered then filtered through the soil back to the lake. The facility includes an International Agriculture Science and Technology Exchange centre. They are focusing on developing eco friendly and energy saving techniques for agriculture.
The facility contains laboratories, trial plots for horticulture cotton, oils and grain, research on stock, residences for staff and employees (as well as recreational areas), lecture theatres, conference and banquet facilities for dignitaries and international visitors. An education and display centre for tourists, researchers and dignitaries on the history of agriculture on the Yellow River, a history of Science and technology in agriculture as well as new agricultural species. There is 23,000 m2 of joint green houses and 6700 m2 of sunlight green houses. Driving around the facility, seeing the trial plots, green houses and other infrastructure was inspirational on what can be done when the government values agriculture.
Outcomes of the study tour;
1. The amount of investment in Agriculture in China is immense. The transgenic program in China alone is 5 billion yuan/yr (approximately $ 1 billion Australian)
2. Feed grain is the growth area, we need to develop animal specific grain. We also need to ad quality attributes to the milling grain by-product that is used for feed. Currently our grain is sold according to protein which could be 10 to 12 % we need to establish the qualities within the remaining 90 to 88% of the grain. This will allow us to supply a better value product that will win back market share. (Innovation)
3. Australia needs to invest in supplying feed grains with attributes suited to the specific animals.
4. We want a ‘proof of concept project’ looking at feed grains to increase yield and performance in the animals. The ‘proof of concept’ must include transgenics to reduce the amount of time required to develop this product.
5. Reverse engineering using the mixolab to get the flour signatures will identify if we have any varieties wheats that are close to the white traits of Mongolian Wheat.
6. Markets exist for wheat that produces a bright, white flour.
7. Market exists for flour to produce western style products with higher value such as biscuits which have the highest margin.
8. “Australian Marketers are sleeping” this was stated at the Australian Chemistry Conference in Canberra, and this is definitely the message we got from our tour. China is using less Australian wheat, information is hard to find, flour is getting yellower the opportunity exists for a whiter product for the Chinese market.
9. Development of a farmer direct to market facility. This would include authenticity certificates for quality control. A niche market in china is a still a large market. WA Grains Group will work with the China Specialists at Murdoch University to initiate the concept. This would be expanded to other customers and all farmers across Australia.
10. The tour allowed the researchers and the farmers to re connect and have a flow of information that has been missing for some time in Australian Grain Industry, (how it use to be in the 60’s).