Barley: Australia Would Grant No Further Extensions to China
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Australia’s Barley exports for MY 2023/24 are estimated at 5 MMT, 3 MMT below the estimate for MY 2022/23 of 8 MMT. This is a significant drop, and this reduction is driven by the forecast 4.1-MMT decline in Barley production, while domestic consumption is forecast to remain stable. However, global demand for Australian Barley is expected to remain firm, and Barley ending stocks are expected to decline to meet the forecast export demand. While overall exports are expected to be down, destinations may also shift if China returns as a market.
The Chinese Ministry of Commerce announced on April 14, 2023, that it would commence a three to four-month review of its anti-dumping and anti-subsidy claims against imported Australian Barley. This announcement occurred as the World Trade Organization (WTO) was due to hand down a finding over the dispute. Instead of this review, Australia has agreed to temporarily suspend its case at the WTO over these import duties imposed by China.
In the three marketing years preceding China imposing import tariffs on Australian Barley, the trade value averaged US$909 million per year with an average trade volume of 4.4 MMT. But in the three years from MY 2020/21 to MY 2022/23 (November to February trading period), Barley exports have increased and diversified substantially since China imposed the duties. Before this, for many years, China was by far the dominant export destination for Australian Barley. Over the last three years, Saudi Arabia has become the major export destination for Australian Barley, but far less prevalent than China. Importantly Australia – Vietnam, Kuwait, Jordan, and the Philippines – have become significant Barley export destinations over the last three years as Australia has successfully pivoted its Barley trade away from China.
FAS/Canberra’s Barley export estimate for MY 2022/23 is 8 MMT, in line with the official USDA estimate. If realized, this would be Australia’s third-largest Barley export program, marginally behind the previous two marketing years. Early season Barley exports in MY 2022/23 have started extremely strong, reaching 3.15 MMT between November 2022 and February 2023, and this is almost identical to the same period in MY 2021/22, which achieved full-year exports of 8 MMT. With this trend, exports are on track to reach the MY 2022/23 estimate of 8 MMT.
According to AgFlow data, Australia exported 299,076 tons of Barley to China in May-June 2023, followed by Singapore (110,000 tons), Japan (105,000 tons), the United Arab Emirates (85,000 tons), and Thailand (80,000 tons).
Australia-China Barley Trade
China has asked for an extra month to decide whether to scrap hefty tariffs on Australian Barley, dashing hopes of an imminent breakthrough in one of the most significant trade disputes between the two countries. Australian Government said it was disappointed by the delay, and warned that it was ready to revive its case at the global trade umpire, the World Trade Organization, if Beijing doesn’t scrap the measure by August.
A failure to reach a deal would also be a setback for Australian wine exporters because the Government had hoped the Barley review would end up being a “template” to end similar imposts on that sector.
China was to reconsider its Barley tariffs in return for Australia agreeing to suspend its challenge at the WTO at the eleventh hour. China and Australia have notified the WTO dispute panel that they have agreed to extend the suspension by one month to 11 August. But a spokesperson for the foreign affairs minister, Penny Wong, and the trade minister, Don Farrell, indicated that Australia would grant no further extensions.
Other sources: USDA
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