Canada Markets

According to Reuters, Australia's trade issues with China began in 2020 when Australia was calling for an inquiry into the origin of COVID-19. Reuters reports that Australian Trade Minister Don Farrell reported that the trade penalties initiated by China had affected $20 billion in annual sales, reducing this to $2 billion as of May of this year. The consequences were harsh, which included as much as $1.5 billion AUD of barley exports per year.

Earlier in the week, media reported that China is facing a deadline of August 11 to report on a review of Australian barley import duties. The duty has been set at 80.5%, while Australia has agreed to suspend its World Trade Organization challenge for a three-month period as China reviews this tariff.

Today, it is widely reported that days ahead of this deadline, China will eliminate anti-dumping tariffs on its barley imports from Australia, while Australia is using this decision as a call to end all anti-dumping charges and "unofficial restrictions" that are imposed on wines, lobster and meat originating from certain processors, as reported by Reuters.

"We intend to use this process (barley) as a template for resolving the issue in respect of wine, which is still ongoing ... as we seek to resolve all of those outstanding issues," Australia's Trade Minister Farrell reports to Reuters.

Australia's government statement indicates "This outcome demonstrates the importance of the WTO (World Trade Organization) dispute mechanism in defending the interests of Australia's world-class producers and farmers," as reported by ABC Rural.

China is to remove the barley duties on August 5.

The move will have implications for Canada's barley trade with China. As of June, or the first 11 months of 2022-23, the Canadian Grain Commission reports that Canada has exported 2.9075 mmt of barley, with 91% destined for China. For a third consecutive year, the share of Canada's barley exports to China have been 89.6% of total volumes shipped or higher, which includes data for 11 of 12 months of 2022-23. As seen on the attached chart, volumes fell in 2021-22 only because of the drought-reduced crop produced in 2021.

While changing trade patterns may prove detrimental for Canadian exporters, the domestic feed industry will welcome the news. As of July 27, the USDA reports 528,900 mt of corn sold to Canada, due to concerns of barley supply.

Cliff Jamieson can be reached at cliff.jamieson@dtn.com

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