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Community & Business

1 September, 2020

China’s Got Beef With Our Barley

China has imposed an 80 per cent import tariff on Australian barley following an investigation that began in November of 2018. China alleges that Australia has been engaging in “dumping”, which is the act of exporting the barley for below market prices. Doing so can disadvantage China’s domestic producers, pricing them out of the market.

Dumping is not explicitly illegal, but it goes against the spirt of free trade. Australia and other countries have anti-dumping guidelines which create the processes that lead to these tariffs.

Andrew Newton of Silo Bag Grain said the implications of such tariffs will not be felt too harshly in the immediate future in western NSW thanks largely to a healthy domestic market.

“I think on the eastern seaboard it’s not going to have huge implications,” said Mr Newton.

“Obviously, China is in the top three for barley imports over the last few years, we export predominately a lot of grain to them. From where we’re situated on the eastern seaboard, we have a domestic feed demand, for the feedlots and stuff like that.

“The whole Australia domestic feed demand on stats is roughly five million tonnes, that’s what we consume. Around 90 per cent of that is all on the eastern seaboard, Victoria, NSW and Queensland. We’ve got a good demand base from the stock feed and things like that, but it will probably affect more so the Western Australia growers who don’t have huge domestic demand.”

Mr Newton said that over the last three years Australia has exported over 13 million tonnes of barley. Given that the eastern seaboard has just come out of a historically harsh drought, grain stocks are low, and Mr Newton is confident that the domestic demand can absorb a big crop.

“What you’ve also got to remember is on the eastern seaboard we’ve had very little carry-over tonnes of wheat and barley. Our supply is very low, so even if we do grow a bumper, we should be able to absorb a fair bit and put a bit in storage.”

Mr Newton also stated that other large barley markets may be available to exporters such as Saudi Arabia and Iran.

Trade tension with China don’t end at barley however, with the country recently instituting ban on beef from particular meat processing plants in NSW and Queensland.

Local stock and station agent Paul Alchin said this isn’t the first time something like this has happened.

“What my understanding of it is, is that the ban is isolated to four meat processing plants. While that’s certainly not an insignificant amount, it’s not all of our processing plants that are affected,” Mr Alchin said.

“There are three abattoirs in Queensland and one on the north coast in Casino that have been suspended for the moment. My understanding is that it’s over some labelling issues and some certificates to do with that labelling that are in question which relate back to 2018.

“It’s not a new thing, these sorts of things happen from time to time with not just China, but any country we’re exporting to. You can come across issues to do with the way the paperwork and the protocols are done and if they’re not up to the expectations of the country you’re exporting the meat to, then they will put a suspension on it until the plant can prove to people that they can adhere to the protocols,” he said.

Mr Alchin said that the national media spotlight being placed upon the ban was somewhat “overblown”.

“To an extent, taken in isolation, yes I think it probably has been a little overblown. It is a concern when we’re suspended from any of the markets we’re exporting to because certainly as a country we rely on our agricultural exports to be at their best.

“Any time that we lose a market overseas there’s the chance that the ripples come back down the supply chain to the producer, so there is always a chance that can happen. My thoughts with this one are that having had some history of these things being worked out before, not necessarily with these same abattoirs, but the general problem has been worked through before and that the right people will be able to do that again.”

Mr Alchin said that the ban had not yet had any discernible effect on market or auction, with no “noticeable downturn”.

“You wouldn’t want to see it escalate or happen over a drawn-out period because eventually it would have an effect on or producers. I’m not trying to play it down, but I think if you look at it in isolation, it probably isn’t as big an issue the national media might have hopped onto it.

“I think our bigger issue at the moment is the outcome of the barley tariffs. That will have a direct and significant effect on our producers until that is worked out. Hopefully by harvest things will have been sorted out between the two countries.”

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