Japan lowers percentage of club wheat



Capital Press

Japan is reducing the percentage of club wheat it uses in blends of western white wheat due to short supplies.

But the Washington Grain Commission expects the supply of club will increase again next year with a new crop.

Commission Vice President Glen Squires recently returned from the annual U.S. Wheat Associates crop quality tour of buyers in Asia.

The supply of club wheat is down, Squires said, and the expected level of demand will make things pretty tight before the end of the marketing year.

The majority of club wheat is grown in Washington. Some is grown in Oregon and Idaho.

Japan is the largest buyer of western white wheat, which incorporates 20 percent club wheat and 80 percent soft white wheat. The wheat is mostly used for sponge cakes, pastries, cookies and crackers.

"Club wheat has a weaker gluten, and it brings proper milling and baking properties to the soft white blend needed for their end use," Squires said.

Japan's domestic crop production was less than anticipated, Squires said, and the country is considering purchasing 150,000 to 200,000 metric tons more this year than anticipated at the beginning of the marketing year.

Japan's flour millers want the wheat to make up for the shortfall to be western white, Squires said.

If that much wheat is purchased, Squires said, it would be the highest amount of western white Japan has bought in a decade.

"If you take the amount of club wheat we have and try to apply it to that increased demand, it's clearly not enough," he said.

Japan's government buying agency, the Ministry of Agriculture, Forestry and Fisheries of Japan, or MAFF, negotiated with millers, concluding they would lower the percentage of club wheat in western white to 10 percent in order to accommodate the increased demand.

"The club situation still will remain tight. It's just spread over a larger amount of demand," Squires said.

Japan doesn't want to reach the end of April and not have enough club wheat to finish out the year before the new crop comes on in August, Squires said.

"That would be a bad situation, if the No. 1 buyer is not able to buy western white," he said.

There is a premium price paid to U.S. growers for club wheat over the price paid to growers for soft white wheat. The price of club wheat may not see much of a change because it will still be in short supply.

"It looks like we're going to be selling a lot more soft white wheat," Squires said. "Hopefully that will have some upward pressure on soft white wheat prices."

Thailand and Taiwan are customers for club wheat as well, also using it for cookies, crackers and pastries.

Taiwan has ceased purchasing club wheat in favor of soft white wheat because of the high premiums, but it will return to a 20 percent blend as well. Thailand is keeping the same blend percentage, but has reduced the quantity purchased, Squires said.

The commission message is that supply will be greater at the arrival of the new crop, so it's anticipated that Japan will return to its percentage level of 20 percent club wheat. Squires said the flour millers like that blend percentage.

The return to the blend that is 20 percent club wheat also sends a message to the marketplace and growers that club wheat is important, Squires said.

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