Grower concern regarding export reliance on China

Grower concern regarding export reliance on China

Cropping
China has emerged as a critical market worth billions of dollars to Australian agriculture over the past 20 years but some farmers interviewed by Farmonline felt there has not been enough done to develop alternate trade destinations.

China has emerged as a critical market worth billions of dollars to Australian agriculture over the past 20 years but some farmers interviewed by Farmonline felt there has not been enough done to develop alternate trade destinations.

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Barley producers have concerns over Australia's apparent overreliance on China as a buyer of our grain according to a Farmonline survey.

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AUSTRALIAN barley producers feel there has been too much focus on developing the Chinese market at the expense of growing other buying options over the past decade.

In an official survey conducted by Australian Community Media, 65 per cent of barley producers interviewed said they felt there had been too much emphasis on China and not enough done forging trade links with other nations to have a more even export spread.

China has been a massive consumer of Australian barley for the past 10 years however our reliance on the world's most populous nation has been exposed following the recent Chinese decision to implement tariffs of over 80pc on imports of Australian barley.

It means the Australian industry is now scrambling to find an alternative home for what industry flagged as between 3 and 4 million tonnes of barley it previously expected would go to China.

"You don't want to put too many eggs in one basket and China has proven many times to be untrustworthy," one survey respondent said.

And it was not just the barley industry that came under fire.

"We seem to be relying on China for far to much in ag overall, not just the barley industry," another respondent said.

"We need to develop new markets so we are far less reliant on the Chinese," they went on.

ISurvey participants were split on as to which destinations would pick up the slack where China has left off.

Some 49pc suggested a traditional market in Saudi Arabia would be a bigger buyer of Australia barley while 58pc nominated south-east Asia in a question where people were allowed more than one answer.

However, while the potential loss of the massive Chinese market was seen as a concern there are other matters worrying growers more.

In spite of the positive start to the season over much of the east coast, some 60pc of respondents said seasonal conditions were their major concern.

This may have been influenced by the 24pc of participants from Western Australia where large parts of the state still have not received a meaningful autumn break.

Other concerns included the large global grain crop and its negative impact on pricing, with 26pc of those surveyed saying they saw downside to the market because of a loose global balance sheet.

42pc of respondents said they were planting less barley this year as a result of the Chinese tariffs and the resultant drop in price, while 26pc said they would plant the same amount but not sell at harvest if the price was still low.

32pc said they had stuck to the amount of barley originally in the rotation and would risk a drop in price at harvest.

Of those dropping barley, 73pc said they would plant more wheat, while 32pc said they would incorporate more pulses into the cropping program.

Regarding the rationale behind the barley tariffs, some 56pc of those interviewed said they felt Australia's handling of the call for a review into the origins of COVID-19 had something to do with China's decisions, while 24pc said it was in retaliation to Australia's trade policy with China as a whole and 10pc said it was in light of Australia using anti-dumping measures to prevent China export steel to Australia.

The China-America trade deal was also mentioned as a possible factor.

"I think it is mostly the American trade deal," said one interviewee.

"China does not need barley, they have a trade deal with America that obligates them to buy grain there and it (the barley tariffs) was an opportunity to embarrass the Morrison government."

Others said it was a long-term push to get cheaper product by showing who held the power in the trading partnership.

"It's about the Chinese getting a cheaper price in the long term, by demonstrating the relative power positions of the trading partners."

The story Grower concern regarding export reliance on China first appeared on Farm Online.

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