Australia & China: Aussie farmers, exporters brace for Beijing's big barley tariff hit

China has foreshadowed hitting Australian farmers with a crushing tariff on barley imports as the deadline approaches to respond to anti-dumping action launched through the World Trade Organisation, The Australian Financial Review reported on February 6.

Australian exporters have been given until Monday, February 11 to respond to China's dumping allegations, which came late last year hot on the heels of Canberra moving to counter Beijing's growing influence in the Pacific.

They are bracing for the possibility that heavy provisional tariffs could be imposed within weeks and cripple a trade worth billions of dollars.

China's Ministry of Commerce has outlined a case for an anti-dumping margin of 56 per cent after a big jump in barley imports from Australia.

Farmers, exporters and state and federal governments are also scrambling to respond to what many regard as a flimsy and hastily cobbled together countervailing duties claim lobbed just before the Christmas break that alleges the Australian barley industry is propped up by taxpayer-funded subsidies.

China's countervailing duties claim lists some 32 commonwealth and state initiatives in agriculture, many with no or only tenuous links to barley growing, including the A$10 billion sustainable rural water use and infrastructure program focused on irrigation farming in the Murray Darling Basin.

It is understood trade minister Simon Birmingham recently wrote to China's minister of commerce, Zhong Shan, emphasising the impact the investigations would have on China's domestic industries that rely on Australian barley imports.

Industry insiders estimate major exporters like West Australian-based CBH, Glencore, Archer Daniels Midland and GrainCorp may have spent hundreds of thousands of dollars in legal and others fees preparing responses to China's claims.

Some mid-tier exporters have opted not to respond because of the time and cost involved in addressing China's 88-page questionnaire related to the anti-dumping claims and a 67-page questionnaire on subsidies that delves back into government initiatives over the past nine years.

Grains Industry Market Access Forum executive manager Tony Russell said the Ministry of Commerce had set a "very onerous task" with much of the information requested company specific.

CBH, the biggest player in the barley trade with China and the one with most to lose, was one of the exporters which sought an extension until Monday to finalise its anti-dumping response.

The grower-controlled co-operative led by chief executive Jimmy Wilson has warned barley sales to China are under a cloud as a result of the anti-dumping and countervailing duties claims.

The threat to the trade comes at a time when a disastrous harvest means there is no barley for export from the east coast. In contrast, WA growers have harvested a bumper 4.3-million-tonne barley crop.

Australia's Department of Foreign Affairs and Trade is helping to co-ordinate the response to the countervailing duties claim due on February 21.

Mr Birmingham said the government was working closely with the Australian barley industry on its response and that DFAT would also submit a comprehensive response rigorously defending the interests of the industry.

"Australia's barley producers operate in a competitive global market and in an entirely commercial way, receiving no government subsidies or similar support," he said.

Mr Russell said China could apply provisional tariffs as soon as it made preliminary findings on the anti-dumping responses and single out the exporters it considered at fault.

"The industry is concerned and trying to respond in the best way so that we can kill off the allegations and avoid having tariffs applied," he said.

China says annual barley imports from Australia grew by 67 per cent to 6.4 million tonnes valued at $US1.28 billion from 2014 to 2017 with the average price falling from $US288.72 a tonne to $US198.05 a tonne over the same period. It claims the 2017 import price was well below prevailing prices in Australia and that this harmed China's barley growers.

China used the WTO process last year to force US sorghum exporters to put up a 180 per cent deposit on the value of shipments. It dropped the anti-dumping claim soon after US exporters responded and after talks on the trade war with Washington.

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