Barley dumping impasse to continue

China barley dumping impasse to continue until May

Cropping
Australia's barley harvest is hitting full swing but there is still uncertainty about trade with our largest international buyer of barley, China.

Australia's barley harvest is hitting full swing but there is still uncertainty about trade with our largest international buyer of barley, China.

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China's investigation into alleged dumping by Australian barley exporters is set to continue until May.

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THE Australian barley export sector remains in limbo regarding sales to its most important trading partner in China after the Chinese government announced the extension of its investigation into alleged Australian dumping of barley into the Asian giant.

The findings of the Chinese anti-dumping inquiry were supposed to be finalised by the end of the month, but instead the Chinese government has invoked a World Trade Organisation (WTO) clause that allows the investigation to be extended by a further six months on the initial 12 month study, with a final report now due out in May.

Crucially, this means there will be no idea of a result in the months immediately following the Australian harvest when growers are looking to make their marketing decisions.

Australia can still export to China but there is the potential for the Chinese government to implement provisional tariffs or duties meaning exporters are approaching any sales there with caution.

Grain industry bodies, such as Grain Trade Australia, Grain Producers Australia and Grain Growers warned barley sellers to brace for uncertainty over coming months.

In a statement, the groups said the lack of clarity surrounding Chinese buying intentions was putting downward pressure on barley prices.

However, strong domestic demand is providing somewhat of an antidote to the lack of export buyers.

Geo Commodities managing director Brad Knight said while the Chinese conundrum was important for growers in the long-term at present, with harvest either just started or fast approaching for his clients, primarily located in south-eastern Australia, the investigation extension was not the major concern.

"The good news is that the grain is definitely there, people are seeing the yields they thought could be there and maybe even a little more," Mr Knight said.

"The crops always looked like they could achieve these good yields, but until they got into the paddocks farmers were a bit concerned the dry spring may have taken a toll.

"With the grain now there thoughts are turning to logistics and few farmers will have enough on-farm storage to keep it all, so some will have to hit the system.

"Given the volumes being grown some may now decide the prices on offer are solid enough, while others will just look to get the crop off and stored before thinking of marketing."

"The price off the header may be down on last year but it is still a historically good number."

China instigated the anti-dumping action in November last year, alleging Australian sellers were pushing product into China at prices lower than the domestic market.

The Australian grains industry has always held that there has been no dumping but warned growers to be aware that there was the risk of provisional import tariffs or duties and the groups that issued the statement warned farmers should consider market risk when making rotational choices for next year.

While maintaining there was no wrongdoing, the industry group acknowledged China's right to conduct an investigation.

Even though the domestic market is king on the east coast, especially in the lag time until cheaper Western Australian grain can be shipped around, with deliveries expected from around the start of December Mr Knight said he expected there would be an exportable surplus of barley in Victoria.

"It might not go out in bulk but there will definitely be exports in containers," he said.

Western Australia and South Australia, traditional export focused states, will also see barley head overseas.

The story Barley dumping impasse to continue first appeared on Farm Online.

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