The decision by China to remove duties on Australian barley is welcome and opens the way to rebuild a $1.2 billion annual trade flow, grower representative body, GrainGrowers, said today.
GrainGrowers said dialogue between the Australian and Chinese governments had delivered an outcome in the longer-term interests of both countries and Australian growers.
GrainGrowers Chair Rhys Turton said China was a long-standing and valued market for Australian grain, accounting for 60-70% of Australian barley exports.
“Since the imposition of the duties, we have worked closely with industry and government to resolve the situation, which is estimated to have cost some $2.5 billion over a five-year period.”
“GrainGrowers has strongly championed the WTO process, which, although long and complex, has been critical in encouraging the Chinese and Australian governments to find an acceptable solution.”
Mr Turton said Australian barley growers are relieved the situation is resolved.
“Thankfully, we now have a trading environment that allows us to get on with the business of producing high-quality products that meet the needs of our Chinese trading partners.”
Mr Turton said the industry was thankful for the efforts of Ministers Wong, Farrell and Ayres and the Departments of Foreign Affairs and Trade in resolving the situation.
“The Australian grain industry has historically had longstanding customer relationships with Chinese domestic maltsters and brewers, with premium prices paid for specific value-driven products. The decision to remove the duties has opened the door to resume these strong trade links.”
Mr Turton said a key lesson for the industry was to work even more closely with the Australian government to prioritise trade diversification and market access for Australian agriculture and the grains sector as well as deepening existing relationships with customers internationally.
“With around 70% of Australian barley production headed overseas, any concentration of exports makes us vulnerable to external market forces. Market diversification to mitigate those risks is a key priority over the long term for the Australian industry.”
Ends
Growers responses
WA: Tracy Lefroy
News of the re-opening of the China market to Australian barley is met with a mix of relief and cautious optimism. Relief, because the closure of this important market in 2020 was a significant blow to barley growers and the re-opening of the market offers the potential to increase sales volume of premium Australian malt barley. Caution due to the recent volatility of the China-Australia trade relationship which led to the market closing in 2020. I think most farmers have a realistic understanding that future disruptions in trade to China are possible.
My hope is that we are able to retain the new markets for Australian barley that were created since 2020. I would like to think there will be ongoing efforts to diversify export destinations and thereby reduce our dependency on any single market.
With the reopening of the China market, barley growers might adjust their production plans to meet the potential increase in demand. This could involve expanding barley cultivation or optimizing existing production practices to cater to the needs of the Chinese market.
The closure of the China export market meant we adjusted our production plans to meet with the reduction in demand for malt barley. We substituted out barley and included larger wheat plantings as a result of the ban.
With the 2023-24 growing season well underway we are currently reviewing plans to include larger malt barley plantings (reducing other cereal crop areas). Malt barley is one of our most profitable crops on a per hectare basis, and with the re-opening of the China market, we are keen to capitalise on this opportunity.
As an industry, I feel that the China barley trade ban served as something of a wake-up call, prompting us to ensure diversification of export markets, that we are aware of, and prepared for, the impacts of geopolitical risks on ag trade and the importance of advocacy for trade rules and dispute resolution mechanisms.
NSW: Martin Honner
The re-opening of the China market for barley will put some confidence back into the market and create additional competition. When the market closed, we dropped barley out of our rotation, and we will now look to incorporate it back into our business operations.
VIC: Daniel Keam
The decision is great news for barley growers opening access again to one of the largest buyers of our grain. The news is welcomed especially if it involves an upward trend in prices to help ease the cost of production pressure.
The trade situation has impacted our profitability, and also caused stress in the short term through the fact that we needed to develop other markets – some of which we had previously sold to and others that we had never sold to!
Media Contact
Chris Rowley
chris.rowley@graingrowers.com.au
0415 140 253