Grain companies are capitalizing on a good domestic crop and Australia’s trade troubles with China to step up exports
Earlier this summer, Canada’s grain companies said they hoped to hit the export markets with strong sales of Canadian barley.
With a great crop maturing and being harvested across most of Western Canada and a prime competitor cut off from China, they’re getting a perfect chance to fulfil those hopes.
“They’re definitely bidding against us,” said Jim Beusekom, president of Market Place Commodities, about exporter demand for both malting barley and feed barley.
Joel Merkosky of Johnston’s Grain said overseas buyers are interested in Canada’s quality crop.
“I’m getting demand from Korea and southeast Asia,” he said.
Canada faces the lucky combination of a (so far) good domestic crop and a competing Australian crop cut off from most of its usual market in China.
China has strangled most Australian barley sales due to an ongoing political dispute. Early in the pandemic, Australia called for an international inquiry into how COVID-19 originated and how it spread so far, so fast, provoking China’s government.
China complained that Australia was trying to blame it for the pandemic and threatened to cut off markets to a number of Australian commodities, such as barley and wine, and encouraged its citizens and students to avoid the country.
Since then Australian barley exports to China have collapsed, creating a growing problem. About 70 percent of Australia’s malting barley is traditionally exported to China. The flow has been shut off by an 80.5 percent import tariff, a measure the Australian government is appealing to Chinese government authorities, which is the first stage of a process that could end up at the World Trade Organization.
China claims that Australian barley is dumped into its market, a claim the Australians reject as a thin disguise for a politically motivated action.
Australia is expecting a good barley crop after years of drought, so the Chinese restrictions could come to hurt severely as stockpiles build up.
That leaves Canada as one of the few other sources of barley for Chinese beer makers. Despite the Chinese political trade action against Canadian canola, which has greatly reduced Canadian canola exports to China, barley trade has been brisk.
Booming early-summer sales appear to have continued into the new crop year.
China has a great thirst for beer, being the world’s largest market and one that relies upon imported barley to raise the quality of its often rice and non-barley-based brews.