07-09-12 Service Builds Foundation for Growing U.S. Wheat Export Sales in South Asia...

Mike Spier, Regional Vice President, South Asia, U.S. Wheat Associates

“In southeast Asia, including  Indonesia, Vietnam and Thailand, wheat consumption is rising rapidly because incomes are improving and tastes are shifting from rice to wheat foods,” Spier said. “That is opening markets for baked goods, biscuits, cakes and other foods that need more types of higher quality flour and per capita annual wheat consumption is growing.”

Spier said that increased demand means existing and new flour mills in the region are rushing to increase capacity. USW is providing technical assistance on how to improve and expand product lines using high quality U.S. hard red spring (HRS) for bread flour and soft white (SW) for cake, biscuit and confectionery flour. At the same time, USW is conducting baking seminars to introduce new products with higher profit margins using flour milled from U.S. HRS, SW and hard red winter (HRW) wheat. 

“Our experienced, well-respected bakery experts are demonstrating the superior performance and value of U.S. wheat compared to competing Australian and Canadian supplies,” said Spier, who directs activities in 30 countries with a regional office in Singapore and a sub-office in Manila, Philippines. “In addition, we have developed strong relationships with buyers in the region and focus on helping those buyers get the best value possible,” Spier told the USW directors. “This trade service and technical assistance yields direct returns.”  

He discussed an example from Vietnam where U.S. wheat imports had dropped early in 2011/12 compared to the year before. Through a grain procurement workshop, USW showed that U.S. HRS supplies were tightening, information that prompted the Vietnamese mills to increase HRS purchases just before prices jumped. In Indonesia, with USW’s assistance, two flour mills have developed premium flour brands using only U.S. wheat supplies and Indonesia now leads the region in HRW imports.

Spier showed that flour millers in the region prefer U.S. wheat for bread, cake, cookie and cracker flours. A survey by Grain Growers of Australia in 2011 showed a similar preference for U.S. wheat in the region, he said. That translates to sales. Exports of HRS to South Asia reached a record level of more than 77 million bushels in marketing year 2011/12 (June to May), Spier said. Total U.S. wheat sales to the region in 2011/12 and 2010/11 averaged about 3.8 million metric tons per year. That is up nearly 20 percent compared to the previous five-year average, he said, and represents more than $1.3 billion in export sales in calendar year 2011. At 35 percent of this growing milling wheat market, U.S. wheat market share is also increasing.

Spier is optimistic that these trends will continue.

“Southeast Asia’s milling and baking industries are thriving and creating excellent opportunities for the U.S. wheat industry,” he said. 

An Oregon native, Spier started his career in 1992 as a grain merchandiser with United Grain Corporation in Portland, OR, and joined USW in 1997 as assistant director of the West Coast Office in Portland. In 1998, Spier relocated to Cairo, Egypt, where he served as the assistant regional director for the Middle East and East Africa. Spier was transferred to Manila, Philippines, in 2002 to become assistant regional director for South Asia and has served in Singapore as regional vice president since 2009.  

U.S. Wheat Associates (USW) is the industry’s market development organization working in more than 100 countries. Its mission is to “develop, maintain, and expand international markets to enhance the profitability of U.S. wheat producers.” The activities of USW are made possible by producer checkoff dollars managed by 19 state wheat commissions and through cost-share funding provided by USDA’s Foreign Agricultural Service. For more information, visit www.uswheat.org or contact your state wheat commission.

# # #