Canada & China: Canadian barley shipments boosted by Chinas feud with Australia
Chinas thirsty beer markets are fueling a surge in Canadian barley shipments amid the Asian nations feud with Australia, the Yahoo Canada Finance reported on July 3.
Canadian shipments of barley to China rose in May as the Asian nation slapped anti-dumping duties on the grain from Australia, its top supplier. Canada exported 175,500 tons of barley to China in May, up 38% from a year earlier, according to the Canadian Grain Commission.
The number of acres allocated to barley in Canada is set to rise to the highest in more than a decade in 2020 and any additional output could be absorbed by demand from Chinas beer and livestock industries, said Errol Anderson, president of ProMarket Communications in Calgary. Canada is one of the worlds major barley producers and among the top exporters.
Unfortunately, whats happening to Australia will benefit Canada, Anderson said by phone. If China comes into the market, really those additional acres will be absorbed easily.
Canada, the second-largest malt-barley exporter to China, had already been trying to gain a bigger share of Chinas beer market from Australia. The northern nations barley has higher protein than crops from Australia and that quality helps in fermentation to give beer more body and foam retention.
Canadian efforts to ship more barley overseas have been successful, even before Chinas tiff with Australia, said Tom Steve, the general manager of Alberta Barley. Production cuts in Australia due to drought in past years have helped Canadians boost shipments to China to about 1.5 million tons a year, he said.
The challenge for us is to try and secure those markets longer-term, Steve said.
Its not just Canada thats eyeing Chinas need for barley. Exports from France are poised to benefit from the Australian tariffs, and consultant Strategie Grains boosted its outlook for this seasons European Union barley shipments by 6% in a June report, citing higher projected sales to China. There have been multiple shipments of feed and malting barley loaded from France and destined for China in the past few weeks.
Prices in Europe and Canada are firm as a result. Feed barley in Saskatchewan has risen more than 8% since May and is currently at the highest price since July 2019, according to data from Farmco.
The potential for increased barley shipments comes at the same time as simmering tensions between Canada and China shrink demand for another major Canadian crop. Last year, China suspended the licenses of two major Canadian canola shippers, citing pest and quarantine concerns - though the move was widely interpreted as retaliation over the arrest of a Huawei Technologies Co. executive in Vancouver. Canada is the worlds top grower and exporter of canola, an oilseed used in everything from salad dressings to deep-frying.
They havent picked on barley for politics, whereas canola is on the hit list, Anderson said.
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