China yesterday launched a probe into whether Australian barley suppliers dumped cheap imports into their biggest market over the past year, catching the grain trade on the hop just as drought shrivels Australian crops and drives prices higher.
Coming amid strained diplomatic ties between Beijing and Canberra, the move by the Chinese Ministry of Commerce came after the China Chamber of International Commerce complained that Australian barley was sold at lower-than-normal prices for the 12 months through September, hurting domestic suppliers.
Australia is by far China’s top supplier of barley, used both in brewing and livestock feed.
It exported 6.48 million tonnes last year, close to three-quarters of China’s about 8.86 million tonnes of imports of the grain, worth about US$1.5 billion, according to Chinese customs.
The timing of the move left grain analysts and traders scratching their heads for an explanation, with some among the latter suggesting it might be politically motivated: Australian barley has become expensive as supplies have dwindled amid extreme drought.
“It’s a bit odd to take this moment to ask the [Chinese] state to put safeguard measures in place,” said Even Rogers Pay, an agriculture analyst at China Policy, a Beijing-based consultancy.
The probe follows a period of tense relations between Australia and China. Former Australian prime minister Malcolm Turnbull accused Beijing of interfering in its domestic affairs while in office, and the two countries have been jostling for influence in Pacific island countries that control swathes of resource-rich ocean.
The probe is to end within one year, with an option for an additional six months of investigation.
The commerce chamber said in its request for an investigation that the volume of barley imports from Australia jumped 67 percent from 2014 to last year, while prices slipped to US$198.05 per tonne, nearly a third below their 2014 level.
The ministry would also look into whether domestic suppliers’ business was damaged in the period from Jan. 1, 2014, until Sept. 30.
China last year produced 1.66 million tonnes of barley, according to the commerce chamber, down from 1.81 million tonnes in 2014.
High prices have curbed demand from China’s animal feed makers.
Australian barley costs about US$275 per tonne including freight, about the same price as Chinese corn.
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