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Australian barley farmers to look for alternative trade relationship after China imposes an 80% import tariff

May 26, 2020

1 mins read

The Chinese Ministry of Commerce (MOFCOM) announced a 73.6% anti-dumping tariff, and 6.9% subsidy charge to all Australian barley imports. These tariffs are in response to an anti-dumping investigation initiated by China in November 2018 and are set to be in place for five years.

As China accounts for half of Australia’s barley exports, the tariffs are likely to impact demand and result in huge losses for Australian farmers. In fact, market participants have reported significant price declines for both malt and feed barley, following the announcement of these tariffs. Such import tariffs are likely to make Australian barley exports to China almost impossible, leaving an estimated void worth $500 million. China is likely to source from other exporters such as France, Canada, and potentially Argentina for malt barley and the Black Sea region, for feed barley.

Meanwhile, Australia will most likely have to rely on trade relationships with alternative markets. Australia continues to develop its relationship with key importers such as Japan, Saudi Arabia and Thailand. In addition, a free trade agreement with Indonesia is due to be implemented in July after the implementation of the Indonesia-Australia Comprehensive Economic Partnership Agreement (IA-CEPA). As Australian barley is well-known for its premium quality, for both malting and feed purposes, da high level of demand is still likely, potentially curbing some of the long-term bearish trend.

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Topics: Grains & Feed
alana blog
Alana Barros

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