CHI­NESE BURN

Countryman - - FRONT PAGE - Jenne Bram­mer and Cally Dupe

Mil­ing farmer Tony White is brac­ing for a $100,000 hit af­ter China’s bar­ley tar­iff caused prices to plum­met.

Mr White is one of thou­sands of WA grain farm­ers hit by the fall­out from es­ca­lat­ing trade ten­sions be­tween Bei­jing and Can­berra.

Aus­tralia’s ex­ports of bar­ley to China — worth $950 mil­lion last year — will vir­tu­ally stop dead af­ter Chi­nese au­thor­i­ties con­firmed on Mon­day night they would im­pose a crip­pling 80.5 per cent im­port duty.

It comes af­ter an 18-month dump­ing investigat­ion.

Un­til now, China has been Aus­tralia’s big­gest cus­tomer for the grain, used to make malt in beer and for stock­feed.

Mr White and his brother Paul had just fin­ished seed­ing 700ha of bar­ley as part of their 3400ha pro­gram when it was re­vealed two weeks ago China was weigh­ing up a tar­iff. Prices plunged almost 20 per cent, or $50 per tonne, when the tar­iff was floated, al­though it has re­gained some ground since.

Aus­tralia’s ex­ports of bar­ley to China — worth $950 mil­lion last year — will vir­tu­ally stop dead af­ter Chi­nese au­thor­i­ties con­firmed on Mon­day night they would im­pose crip­pling 80.5 per cent im­port du­ties, af­ter an 18month dump­ing investigat­ion.

Un­til now, China has been Aus­tralia’s big­gest cus­tomer for the grain, which is used to make malt in beer and for stock­feed.

China im­ported 2.3m tonnes of Aus­tralian bar­ley in 2019, worth more than $950m.

The tar­iffs, paid by cus­tomers buy­ing Aus­tralian bar­ley, ar­ti­fi­cially in­flate the price, ren­der­ing it un­com­pet­i­tive against other sup­pli­ers.

While Aus­tralia will look to other mar­kets with the big­gest buyer of Aus­tralian bar­ley now out of the equa­tion, prices have fallen, which will hurt farm­ers’ re­turns and have knock-on ef­fects through­out com­mu­ni­ties.

The weaker prices are ex­pected to cost WA’s 3000 or so bar­ley grow­ers about $200m in re­duced in­come, while na­tion­wide the cost to grow­ers is es­ti­mated at $500m, ac­cord­ing to Co-Op­er­a­tive Bulk Han­dling.

CBH mar­ket­ing and trading gen­eral man­ager Ja­son Craig said be­fore China’s threat to im­pose tar­iffs two week­ends ago, the aver­age bar­ley price be­ing paid to farm­ers was about $270 a tonne.

The price dived by more than $50 a tonne (18.5 per cent) overnight af­ter China made the ini­tial an­nounce­ment 10 days ago, and has since edged back to about $240 a tonne (11 per cent down from be­fore the an­nounce­ment).

Other po­ten­tial buy­ers for Aus­tralian feed bar­ley in­clude Saudi Ara­bia, Thai­land and the United Arab Emirates, while the main al­ter­na­tive mar­kets for malt­ing bar­ley are Viet­nam and Japan.

Mr Craig said malt­ing bar­ley would be most af­fected by the loss of China as a mar­ket, be­cause the com­bined al­ter­na­tive mar­kets in­clud­ing Viet­nam, Japan, In­dia, Africa and South Amer­ica, only ac­counted for 60 per cent of the to­tal ca­pac­ity of China.

Al­though WA farm­ers have in re­cent years grown more than 75 per cent of the State’s bar­ley ex­ports to China, other States were ex­pected to pro­vide a big­ger por­tion in 2020 af­ter drought-breaking rains in many ar­eas put them on

track for rea­son­able crops and higher pro­duc­tion this year.

The move to im­pose tar­iffs co­in­cided with a fall in China’s de­mand for malt, with beer con­sump­tion down by 30-40 per cent as a re­sult of the COVID-19 pan­demic, Mr Craig said.

Chi­nese de­mand for feed bar­ley is also down be­cause African swine fever has wiped out about half of China’s pig herd.

“The whole in­dus­try is very dis­ap­pointed by this de­ci­sion. We also feel very much for our cus­tomers, some of whom we have worked with for more than 40 years and who are very strong sup­port­ers of WA grow­ers,” Mr Craig said.

WAFarm­ers pres­i­dent Rhys Tur­ton said the tar­iff would cost mil­lions and force many grow­ers to change their crops and dump bar­ley.

He la­belled China’s claims Aus­tralian farm­ers were heav­ily sub­sidised and were dump­ing bar­ley “an ab­so­lute joke”, say­ing sub­si­dies to Aus­tralian grow­ers were the low­est in the world, addingthat the dump­ing claims had not been sub­stan­ti­ated.

While WA Agricultur­e and Food Min­is­ter Alan­nah MacTier­nan has es­ti­mated grower in­comes would be slashed by up to $200m this year, Mr Tur­ton said he be­lieved it would be “sig­nif­i­cantly more”.

Mr Tur­ton, who farms mixed grains, hay and sheep in the Wheat­belt, said grow­ers who had not yet sowed would plant sub­sti­tute crops, with many choos­ing wheat. He plans to re­duce his bar­ley out­put, which usu­ally com­prises 30 per cent of his crop.

While China’s brew­ers and malt­sters pre­ferred Aus­tralian bar­ley, Mr Tur­ton said they would not pay the much higher prices caused by the tar­iff and would in­stead turn to sup­plies from Europe and North Amer­ica.

Mr Tur­ton strongly en­cour­aged the Fed­eral Govern­ment to ap­peal to the World Trade Or­gan­i­sa­tion, an op­tion Trade Min­is­ter Si­mon Birm­ing­ham is keep­ing open.

“The in­dus­try would cer­tainly sup­port the Govern­ment in its ef­forts,” the farmer said. Bei­jing an­nounced the tar­iffs on Mon­day, con­firm­ing the in­dus­try's worst fears over an investigat­ion that be­gan in 2018 into al­le­ga­tions Aus­tralia “dumped” bar­ley too cheaply into China, hurt­ing do­mes­tic pro­duc­tion.

The slug com­prises a 73.6 per cent “dump­ing” tax and a 6.9 per cent tar­iff on sup­posed Aus­tralian Govern­ment sub­si­dies.

China claims the Mur­ray-Dar­ling Basin Plan and drought as­sis­tance amount to sub­si­dies — claims Se­na­tor Birm­ing­ham has la­belled “com­pletely ridicu­lous”.

“The Com­mon­wealth has stressed the trade dis­pute is a sep­a­rate is­sue to Aus­tralia be­ing among the first na­tions to call for an­swers from China about the ori­gin of COVID-19 but those in the in­dus­try could join the dots”, Mr Tur­ton said.

WA Premier Mark McGowan has of­fered to help smooth ten­sions but the Fed­eral Govern­ment has so far not ac­cepted his of­fer.

WA Asian En­gage­ment Min­is­ter Peter Tin­ley urged cau­tion.

“You can still stand up for what you be­lieve in but the way you do it, you con­duct your­self in the in­ter­na­tional sphere, is very, very im­por­tant,” Mr Tin­ley said.

Mr Tur­ton said the in­dus­try was “brac­ing” it­self, await­ing ne­go­ti­a­tions.

China is Aus­tralia's largest bar­ley ex­port mar­ket, while Aus­tralia is its big­gest sup­plier, with WA the ma­jor pro­ducer.

We also feel very much for our cus­tomers . . . who are sup­port­ers of WA grow­ers.

Ja­son Craig

Pic­ture: Jack­son Flin­dell

Tony White and son Xavier, 7.

CBH’s Ja­son Craig.

Pic­ture: Si­mon Santi

York farmer Rhys Tur­ton.

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