China’s anti-dumping investigation into Australian barley delivers a dark cloud for Australian barley growers and Chinese brewers and maltsters alike. This stems from the deposit rate that can be put in place in anti-dumping cases – effectively a large temporary tariff designed to redress commercial damages to Chinese businesses from ‘dumped’ goods – and the elevated risk this case introduces to the trade.
For Australian barley farmers, the investigation is a dampener in an otherwise bright price outlook. Global barley stocks are at 35-year lows and a current Australian supply deficit means local prices will remain elevated until at least harvest in 2019.
However, China is the number one importer of Australian barley, accounting for 55pc of our exports. Should there be a good 2019-20 winter cropping season, Australia will need the Chinese market to absorb our renewed barley supply.
China’s brewers and maltsters are heavily dependent on imported malting barley – accounting for around 80pc of total Chinese usage – and Australian barley accounts for about 80pc of those imports. China can replace barley imported for feed, but for malting barley, it is hard to see that buyers can shun Australia completely. Seeking alternative origin malting barley will assist, but the volumes being sought are significant compared to what is available outside Australia.
The Chinese government must wait 60 days after the announcement of the investigation to impose a deposit rate – so until early February. Whether a rate is imposed and whether it is near the level temporarily set on US sorghum by China in April this year – 176pc – will be the telling factor.
