Australia & China: Chinas import tariff on Australian barley could boost volume of Australian malt exports
The news that China has imposed a tariff of 80 per cent on Australian barley has hit the industry hard, but the market may be able to find a partial solution by value-adding the grain at Australian plants and exporting the malt, Grain Central reported on May 20.
While Australian maltsters have limited surplus capacity, exports of malt instead of malting barley could supply roughly 10 per cent of the demand from Chinese breweries, and save them from having to rejig their production to accommodate malt from barley from other origins.
Grain Central understands global demand for malt has eased as a result of COVID-19, which has freed up some capacity at Australias big industrial malting plants.
I understand the maltsters have reduced demand through their assets, and Id imagine they are trying to find a way around that now, Cory Johnston senior grain trader Justin Fay said.
Theyre not going to be able to take the 3.5 million tonnes (Mt) of malting barley Australia would normally send to China, but they could take some.
Chinas tariff on Australian barley has come into effect this week and is expected to last for five years.
Extending beyond that, if we have demand from China for our malt, and were looking at a five-year proposition, there could even be some increase in capacity in Australia.
Mr Fay said malting varieties like Planet and Spartacus were sought by maltsters in China as well as Australia, and exports of Australian malt could keep consistent quality flowing through the supply chain.
If you put yourselves in the shoes of a Chinese brewer, they might be willing to pay tariff.
Grain Central understands some Chinese maltsters may be prepared to pay the tariff on Australian barley because of the efficiencies it represents in terms of faster batch times.
Australias malting capacity converts up to 1.2 mln tonnes per annum of barley to more than 1 mln tonnes of malt.
The domestic market consumes around 20pc of production, and the balance is shipped in bulk and containers to export markets.
Australian maltings are owned by:
Axéréals Boortmalt, which has a combined annual capacity in Australia of 550,000 tonnes spread across plants in Devonport in Tasmania, Minto near Sydney, Perth, Port Adelaide, and Ballarat;
Malteurop has Australian production capacity of 200,000 tonnes, all at its plant at Geelong in Victoria;
United Malt Group produces 250,000 tonnes in total at its Brisbane, Geelong and Perth plants; and,
Coopers Brewery in Adelaide produces 54,000 tonnes of malt annually. Boutique operations like Voyager Malt produce small additional tonnages.
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