‘We Do Have Other Buyers For Our Grain’: Aussie Barley Farmers in Response to China Tariffs

Cargo ship enters the harbour, Perth, Australia, December 3, 2011. Mark Dadswell/Getty Images

Australian barley farmers are seeking to develop trade relationships with other countries as the Chinese regime levies heavy tariffs.

On May 18 China’s minister of commerce announced that after 18 months of investigations Australian barley imports will be charged an additional 73.6 percent anti-dumping tariff, and 6.9 percent subsidy charge.

The Australian government and farmers reject these findings.

Farmers have said the increase has made it “economically impossible to sell into that market” leaving a void worth an estimated $500 million.

Barley producers in Western Australia (WA) will be most severely hit with the loss of trade into the Chinese market potentially coming up to $200 million.

WA is the largest exporter of barley in Australia, which is the largest barley-exporting nation, according to WA Farmers Grains President Mic Fels.

Fels said in a statement on May 20: “For most farmers, it is now too late to reduce barley planting, so our focus now in the face of this decision is shifting to shoring up new premium paying markets for our grain.”

According to Fels, Australian barley farmers have a number of factors in their favour. Australian barley is well-known for being of the highest quality in the world, both for malting and as feed grain.

Fels said that Australian growers have the highest quality standards and the most effective and compliant regulation system in the world, as well the lowest level of government intervention, and the most organised and efficient logistical supply chain delivering barley from the farms to the ports.

Speaking to Farm Online, Nick Crundall, Market Check’s head of strategy, said that in the international markets the Australian dollar is favourable and barley is competitively priced.

“We are about as cheap as anywhere at present so the export market is competitive into places like Saudi Arabia and south-east Asia,” he said.

Australian Barley exports report by Australian Export Grains Innovation Centre, 2020. GRDC / Evan Collis

Maintaining and Forging New International Trade Deals

According to a report by the Australian Export Grains Innovation Centre the top three barley importers excluding China are Japan (importing 700,000 tonnes), Saudi Arabia (importing 408,000 tonnes), and U.A.E (importing 210,000 tonnes).

Australian barley exporters have been looking to develop trade with these countries.

“We do have other buyers for our grain, we’re not going to be cast out into the street, that’s for sure,” Fels said.

Australia delivered over one million tonnes of barley to Saudi Arabia earlier this year. The agreement was made before the outbreak in Wuhan of the CCP (Chinese Communist Party) virus, commonly known as novel coronavirus.

Australia and Japan’s trade ministers met via video conference on May 18 and agreed not to impose prohibitions or restrictions on each other, and to uphold supply chain connectivity despite the impact of the CCP virus pandemic.

A free trade deal is due to come into force with Indonesia in July. Indonesia has been a growing market for Australian goods and services which was worth $17.8 billion in 2018-19, making Indonesia Australia’s 13th largest trading partner. Indonesia is predicted to become the world’s fifth-largest economy by 2030.

The Victorian Farmers Federation (VFF) have agreed on a trade partnership with Indonesia.

“This is a significant win for Victorian farmers and it will deliver real results for farmers across a wide range of commodities, include livestock, grains, dairy, and horticulture,” said David Jochinke, VFF President.

Australia has also been looking to grow its trade relationship with India, the world’s largest democracy. Two-way trade with India was worth $30.4 billion in 2018.