Export

Barley finds its way in the world beyond China

Neil Lyon, June 21, 2021

THE Australian barley industry has emerged with renewed vigour from the turmoil of the past year when China imposed an 80.5 per cent tariff on barley imports from Australia that effectively closed the trade.

Reflecting on the issue at the Australian Farm Institute’s ‘Agriculture and trade in disrupted economies’ conference in Toowoomba, GrainGrowers chair Brett Hosking said the industry had found a path through the disruption by sourcing alternative markets and finding new ways to do business around the globe.

“We had a strong relationship with what was our biggest trading partner in barley in China. Overnight that was taken away from us,” he said.

Mr Hosking said in a way China’s decision to slap the tariff on Australian barley in February last year came at a fortunate time for Australia as the previous barley harvest had been a poor one and there was little to export.

Brett Hosking

“Export wasn’t a massive focus and we didn’t have piles of barley sitting around like we do this year. It bought industry a little bit of breathing space. We were able to sit back and decide how we approach trade from that point on,” he said.

“The industry got together and developed some pathways. We identified markets we were keen to explore and barriers that existed in a lot of markets that we were keen to break down.”

Mr Hosking said Australia had successfully expanded trade with existing partners and tapped into new markets that presented opportunities.

“Losing a market like China has given us the opportunity to lift our eyes above the clouds and look around the globe,” he said.

“Saudi Arabia was a good, strong trading partner with us in barley years ago. We have been able to reconnect and see a lot of barley go into Saudi Arabia that could have once gone to China.

“It is going into Saudi Arabia as a feed-type grain which comes at a discount to the malting opportunity we had into China, but it is still a good, solid market.

“We have seen the first couple of shipments go to Mexico. So, when you next try Mexican beer you may just be enjoying some Australian barley.

“We have been able to grow and reinvest in some of our traditional trading partners – Japan, Vietnam, Thailand.”

Business continues

Mr Hosking said while the Australia-China barley dispute was playing out at a political level, the commercial trading sector had maintained its links and business dealings with China on a wide range of other grains and agricultural commodities.

“Bilateral relationships are continuing, particularly with China, making sure as an industry we are still engaged with their industry,” he said.

“The tariffs were a government-to-government decision, it wasn’t done industry-to-industry. We still have some really strong trading relationships with China. There is a lot of wheat going into China at the moment, even a little bit of canola. That gives us the opportunity to maintain the trading relationships which are so important.”

Trade agreements hold the key

Mr Hosking said free trade agreements, like the one with the United Kingdom announced last week, were the way of the future for the grain industry. But, he called for such agreements to be more than simply grain selling arrangements.

“We need to think more than “We want to sell some grain to you”. Part of the Indonesia free trade agreement (signed last year) gives us in Australia the chance to share some of the knowledge we have about processing and using grain, and extracting the best value from that,” he said.

“To go into that market and be able to upskill their people to make sure that when they buy Australian grain they don’t just get a commodity, they get a wealth of knowledge and resources behind it.

“We want to make sure that when countries trade with Australia they are getting more bang for their buck. They are the free trade agreements we want in the future.

“There are a few on the table at the moment like the European Union FTA and with India, and we are even having another look at the TPP (Trans Pacific Partnership agreement) with a different US administration.”

In the meantime, Mr Hosking said Australia was taking China to the World Trade Organisation over the barley tariff dispute.

“That is a priority for the industry. That is largely led by government, but there is a role for industry in making sure government has all the right information they need,” he said.

 

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