Figure 3: Australia Barley Cash Quotes per Incoterm Between Jan 2020 and Dec 2020. It is a widely grown crop (second in size only to wheat) and occupies a large geographic area – around 4 million hectares – and it is dispersed from southern Queensland through to Western Australia. China had until recently bought as much as 70 per cent of Australia's barley exports. The announcement by China of an anti-dumping investigation into Australian barley exports caused a sharp decline in prices across Australia 98, but this effect was short-lived. Contact us. China is Australia’s biggest trading partner accounting for 40% of all exports. China imported 2.5m tonnes of barley from Australia last financial year, which is down from a peak of 5.9m tonnes in 2016-17, but still very significant. The introduction of EXW cash quotes products as well as boosting Barley Exports to other leading importing countries, such as Japan and Thailand, allowed Australia to maintain a strong Barley export market. and from Argentina, Canada, France, Ukraine, and 11 more origins. Nonetheless, the Chinese market represents large volumes, and rebalancing the export destinations is not enough to dump enough volumes to counterbalance the total volume of Australian Barley exports to China. All Rights Reserved. Australian barley is highly sought after by the malting, brewing, distilling, Shochu (Japanese distilled spirit) and feed industries world-wide and is well known for its low moisture content and low foreign material*. Australia will challenge China's tariff on its barley exports in an appeal to the World Trade Organization (WTO). Moreover, China also showed flexibility with its importing pipeline by reinforcing its pool of Feed Barley origins, with Ukraine and Argentina, for example. Australia Barley Exports by Year. Year over year, exported barley dropped -12.6% from 2018 to 2019. However, the degradation of shipments volume from July 2020 onwards is significant compared to the same period in 2019, bearing in mind that Australian Barley crops were exceptional in 2020. The Covid-19 outbreaks and the economic crisis that resulted from it may have had an influence on the bear market situation of the Australia Feed Barley FOB Australia Cash quotes market. With the introduction of a new domestic market Cash Quote product and rebalancing the Barley exports destinations’ shipment volumes, Australia seems to manage the new Chinese policies well. *Foreign material is defined as material that is foreign and alien to barley. Overall, the value of barley exports fell by an average -13.6% for all exporting countries since 2015 when barley shipments were valued at $7.8 billion. Australia produces on average around 2 to 2.5 million tonnes of malting barley and over 6 million tonnes of barley for other uses (mainly animal feed). As China showed flexibility with its Barley pipeline, it is necessary to look at other Australian Barley export destinations to understand how Australia dealt with this event. Figure 4 displays some of the top Australian Barley importers in 2020, with China, Japan, and Thailand shipment volumes per month in metric ton. Breaking that down to malt and non-malting barley, around 1.3 million tonnes of malting barley, and around 4.2 million tonnes of non-malting barley are also exported each year, though these figures vary from season to season. © 2021 Barley Australia. The ban on Barley exports from Australia is a major event for this market and undoubtedly impacts the economy surrounding the commodity. Australia produces high quality 2-row barley, with annual production averaging over 9 million tonnes/year. Harvested grain ha… Only around 30% of the value of lost barley exports to China, equivalent to around $330 million, is estimated to be lost to the total value of agricultural trade in Australia. Of course, that will also depend on Australia’s position at the U.N. Read also: Can Price Variations Predict Trade Flow Volumes? Most importantly, the Australia Feed Barley FOB Australia market is bear from Jan 2020 through May 2020. Exports of Barley, Unmilled in Australia increased to 85 AUD Million in November from 42 AUD Million in October of 2020. AUSTRALIA exported 179,152 tonnes of feed barley in February, up slightly from the January figure, while malting shipments fell by one third over the month to 167,316t, according to the latest data from the Australian Bureau of Statistics (ABS). Prices peaked in December at $440 per tonne for feed barley, before steadily declining to $365 per tonne at the end of the financial year. It showcases the change in strategy operated to compensate for the loss, and the new policy towards Australia’s Barley exports. Therefore, although the impact of the ban on Australia’s Barley exports shows on shipment volume, it is not the case with cash quotes. It could also be that, with the recent development and approval of several Covid-19 vaccines, the situation between both countries will improve, and China will lift the ban. Goodwood South Australia 5034 However, we can track the direct impact on this using trade flows and the cash quotes curves from AgFlow’s dataset. Australia's barley exports to … Australia produces two-row spring barley that is plump and bright with moderate protein content. As the ban continues, for the time being, it will be interesting to see if China’s and Australia’s strategies work and how it impacts Australian Barley exports in the long term. The Australian Barley export volumes to Japan and Thailand increased mainly in September and November; moreover, while this data is still incomplete -it is still early in December at the time of writing this report – December 2020 already shows it will be an important month for these two destinations as well. It resulted in the loss of a significant partner for Australia in general, and more specifically, for Barley. Australia’s barley producers are about to feel the full force of Chinese protectionism after the Ministry of Commerce (MOFCOM) announced on Monday that an 80.5% tariff would be imposed on barley exports from Australia.. Download to Excel (xls) Market … Australia will be seeking alternative markets for its barley exports after China slapped punitive tariffs on them. China is Australia’s biggest customer for exported barley . The coming months will provide more data about cash quotes and trade flows for Australian Barley exports. China had until recently bought as much as 70% of Australia’s barley exports. China's claims annual barley imports from Australia … Privacy Policy. The Cash quote prices available from the dataset on AgFlow’s database, displayed in Figure 3, showed that there were quotes for Ex Works (EXW) and Free On Board (FOB) Incoterms in 2020. In 2017/18 the WA grains industry exported wheat worth $2.83 billion and barley … Powered by Think BIG Creative. As the Barley crop harvest in Australia occurs in May and June, it is customary to see March as the tail end of the shipments and present the lowest total volume. Trade Minister Simon Birmingham has announced Australia is referring China to the World Trade Organisation (WTO) to challenge action taken against barley exports. WA’s grain exports typically represent 40% of Australia’s total grain exports and are sold into more than 30 countries throughout the world. On China’s side, from Figure 2, the overall shipment volumes and origins increased from July 2020 onwards. Figure 1: Australia Feed Barley Shipments in mt to China Between Jan 2019 and Nov 2020. Australia’s major domestic based brewers are tightly linked into Australia ‘s barley production and strong relationships exist between all facets of the industry – from breeder to brewer and all stages in between. In 2020, China is the largest importing country for Australian Feed Barley and represents a large part of Australian Barley exports. This, on the other hand, did not have a similar effect on China, which proved to be flexible with its pipeline and … Thus, Australia had to adapt its strategies in order to find solutions that compensated for this loss – and did so with some success. Australia's barley exports to China were worth $600 million in 2019, falling from $1.5 billion in 2018 because of drought and an effort to diversify into more markets. Terms & Conditions. ​ Field barley International sales from raw barley exports by country totaled US$6.7 billion in 2019. PO Box 263 All in all, Australian Barley exports proved to be robust. China had until recently bought as much as 70 per cent of Australia’s barley exports. Around 88% of barley exports to China are produced on the large grain farms in Western Australia. This is a function of some of our member companies. This data is only a subset of the total number of other importing countries. Indeed, as a short term solution, China imported from Argentina for the first time in 2020 – more than 60 kmt in November, in particular. Domestically, malting barley demand by the Australian maltsters (for supplying both domestic and export malt markets) is around 1.1 million tonnes per year and Australian domestic feed use is around 2 million tonnes each year. The average Australian malting selection rate is the highest of the world’s exporting nations with around 30-40 % of our barley national crop selected as malting quality. Nonetheless, during the September-November period, China started banning Australian Barley exports for several reasons; namely, due to the lack of measures against shipments’ contamination; and also in response to Australia backing the investigation of China as the source of the Covid-19 outbreak at the United Nations.