Australian Barley Makes Big Comeback in China After Tariffs End

Australian barley is making a big return to the Chinese market after Beijing lifted punishing tariffs that halted trade for three years.

China imported almost 314,000 tons of grain from Australia last month, the first purchases from the country since late 2020 and the most since May of that year, according to customs data. China’s imports of barley from Russia and Kazakstan also boomed amid efforts to diversify suppliers.

China was Australia’s largest export market for barley — with trade worth as much as A$1.5 billion ($990 million) in 2017-18 — before Beijing imposed tariffs of more than 80% in 2020 after it accused exporters of dumping as ties between the countries soured. That prompted Chinese beer and feed producers to turn to places like France and Argentina, while Australia expanded barley sales to markets including Saudi Arabia and Japan.

But with relations improving, China in August scrapped the tariffs, opening the way for Australia to regain market share and for competition for trade to heat up.

Australia’s renewed sales means it accounted for about a quarter of the barley China imported last month, according to the customs data compiled by Bloomberg. That made it the country’s second-biggest supplier, behind France, which provided about 46% of the amount China bought. 

Other nations are also making bigger inroads into China’s market. Shipments from Russia more than doubled in October from the previous month to about 128,100 tons, up 12-fold from a year earlier and a record in data going back to 2015. Imports from Kazakhstan totaled almost 119,000 tons, also the most over the period.

Beijing has been trying to boost grain imports from neighboring Russia and Central Asian countries in a bid to diversify origins and cut reliance on some Western suppliers. Chinese Premier Li Qiang has told Russian counterpart Mikhail Mishustin that he wants to boost trade and other cooperation between the nations, underscoring the warm relations the two have forged following Moscow’s invasion of Ukraine.