Australia: Barley exports success in 2020/21 may not sustain its current pace in following years

Prior to China’s Commerce Ministry imposing an 80.5% duty on Australian barley in May 2020, China accounted for approximately two-thirds of Australia’s barley exports. In 2020/21, however, there have been only 34,000 tonnes of barley exported to China (accounting for 0.5 percent of 6.2 million exported so far in 2020/21), which was entirely in November. There have been no exports of barley from Australia to China in the 7 months since then, USDA said in their August report.

Following a bumper harvest, Australia barley exports have exploded, as exporters have successfully found markets to re-direct feed barley exports previously destined for China to other Asian markets, particularly Thailand, Japan, and Vietnam. In fact, the larger 2020 harvest has enabled Australian barley to fill the feed grain deficit in Asia. Australian barley has also found a home as well in Middle Eastern markets, most notably Saudi Arabia. In the first 7 months of 2020/21, Saudi Arabia has gone from importing 70,000 tonnes of barley for the same period in the previous year to importing 2.5 million, accounting for 44 percent of Australia barley exports.

It is unclear whether Australia barley exports will sustain their current pace, as the increase in demand from Middle East countries this year is partially due to supply constraints and export policy decisions from their usual suppliers (Argentina and EU suppliers diverted shipments to China), as well as high feed prices. In this vein, Australian feed barley has become much more competitively priced, especially in comparison to alternative origins for Saudi imports, such as Russia and Ukraine; however, a return to more normalized prices and trade patterns would likely put pressure on Australia barley exports in light of the continued prohibitive Chinese duties. Australian barley producers already made adjustments to account for potential difficulties finding export markets in 2021/22 by shifting some barley planted area to rapeseed, taking advantage of the high prices on offer.

E-malt.com, the global information source for the brewing and malting industry professionals. The bi-weekly E-malt.com Newsletters feature latest industry news, statistics in graphs and tables, world barley and malt prices, and other relevant information. Click here to get full access to E-malt.com. If you are a Castle Malting client, you can get free access to E-malt.com website and publications. Contact us for more information at marketing@castlemalting.com .