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China demand drives barley prices up 33pc as 80.5pc tariff hits Oz

CHINA has effectively banned Australian barley, used as animal feed and liquor production, with an 80

22 March 2021 - 19:00
CHINA has effectively banned Australian barley, used as animal feed and liquor production, with an 80.5 per cent tariff, reports Nikkei Asia.

But Beijing's high demand to restock its swine herd after a massive cull because of disease, has driven up world prices as high as 33 per cent year on year.



The Australian barley ban comes after Canberra backed an international inquiry into the root causes of the Covid crisis in China.



Before May 2020, Australia was China's main barley source. But Chinese importers are now escaping the whopping tariff on Australian barley by buying up unprecedented volumes from France, Argentina, Canada and Ukraine. Australian farmers, meanwhile, are finding new outlets.



In the 12 months ending in June, China will buy 6.7 million tons or barley, up from 5.5 million tons last year, according to the London-based International Grain Council.



According to the IGC Grains and Oilseeds Index, barley prices in France, Germany, Australia, the Black Sea region and Argentina were US$258 per ton on March 5, up 33 per cent year on year. Prices in Canada were up 33 per cent too.



'There is a growing demand from China's livestock industry for barley as a substitute for expensive corn and other feed grains,' said Hang Seng Bank economist Dan Wang.



'The Chinese pork industry is still below the 2017 production capacity, so we will see rapid capacity build-up in at least the next two years, while the demand for barley to make high-end liquor is rising as well, which is a trend that was accelerated post-Covid,' she said.


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