Partner Spotlight
The Philippines have seen a tremendous period of growth in the past decade and wheat imports have been a major benefactor of this growth.
In the marketing year (MY) 2019/2020 the US set a new export record to the Philippines with imports of all US wheat classed exceeding 3.14 MMT, with the majority of imports being hard red spring wheat. According to data collected by Euromonitor, Filipino consumers consider loaf bread an essential item with purchases rising by more than 10% through 2020, even during the pandemic. Currently, approximately 50% of the flour sold in the Philippines is used for bakery products like bread and hamburger buns, with 20% going toward noodles, and 25% for crackers, cookies and cakes, along with small amounts for pasta and snack foods. The long-term trend in the Philippines is to consume less noodles than neighboring Southeast Asia countries, which puts a very high priority on bread products. And although rice consumption is four times higher than wheat, the growth pace for wheat is substantial.
Since 2013, the Philippine milling industry has seen four new flour mills become operational, and with that wheat imports have nearly doubled in the same time frame. Imports of 7 million metric tons (MMT) each of the past three marketing years consistently place the Philippines as a top market for US wheat. The United States typically controls over 90% of the milling wheat market, although improved production in Australia makes their Australian Prime Hard (APH) high protein wheat a viable competitor.
The baking industry in the Philippines has also seen tremendous evolution. Small and medium bakeries account for around 50% of the market share, with fewer than 100 bakers full or semi-mechanized. Large volume bakeries have capitalized, and mass production has become a trend as bakery operations look to reduce selling price and improve competitiveness and efficiency. Expansion requires the flour milling industry to maintain higher quality and consistency to meet the needs of these advanced production lines, which is an excellent fit for the high-quality wheat grown in Montana.
Our partners at US Wheat Associates (USW) have done a tremendous job in the Philippine market. A study funded in 2020 shows that consumption is driven by cost, sense that food is filling and energizing, healthfulness, and convenience. With this information, USW and the milling industry produced an excellent consumer campaign to promote the benefits of US grown wheat.