Three years after steep Chinese tariffs halted imports of Australian barley as tensions between the two countries ratcheted higher, the grain once again is flowing freely.
Barley is not only used to brew beer, but to feed pigs, and China was Australia’s leading market, taking 50 percent of its barley exports. China has imported 314,000 tonnes of Australian barley worth A$139 million (US$94.7 million) since the government scrapped its 80.5 percent tariffs in August, the Australian government said early this month, citing official Chinese data.
The resumption of trade is a welcome relief for Australian farmers, who saw a nearly A$1 billion market evaporate in 2020.
Photo: Bloomberg
“In the two months following the market’s reopening, [CBH] Marketing and Trading shipped two vessels of barley to China,” the CBH Group, a cooperative of more than 3,500 Western Australian grain farmers, said in its annual report.
Tensions between the countries began to mount in 2018 when Australia excluded Chinese telecommunications giant Huawei Technologies Co (華為) from its 5G network. Then in 2020, Australia called for an international investigation into the origins of COVID-19 — an action China saw as politically motivated as it came from a close partner of the US.
In response, Beijing slapped high tariffs on key Australian exports, including barley, beef and wine, while halting its coal imports.
A slowdown in China’s economic growth has spurred Beijing to rekindle its relationships with its trading partners.
Meanwhile, Australia sought out and found new markets to offload its harvests — it is the world’s third-largest producer of the grassy grain.
“It caused us to pivot, so we found new markets, like Mexico. We managed to have tariffs lowered, which were previously in excess of 100 percent,” said Sean Cole, acting general manager of the GrainGrowers trade association.
“With China gone, Australia was really forced to go back to more traditional customers in the feed market, mainly the Middle East and Saudi Arabia, where we’ve been for over 20 years,” he said. Between June last year and June this year, Saudi Arabia became the leading importer of Australian barley, data from the Australian Bureau of Agricultural and Resource Economics and Sciences (ABARES) showed.
Lyndon Mickel farms a 6,000 hectare plot near Beaumont in the southwest part of Australia. His most recent harvest fields of grains and peas was the 23rd of his career, but it has taken time to bounce back from the Chinese tariffs.
“We’ve had a reduction in price, but we’ve been fortunate we’ve had two very good years in that time crop-wise, so what we’ve lost in price, we’ve gained in tonnage anyway,” he said.
However, those boom years — producing more than 14 million tonnes of barley in the past two harvests — are over.
As El Nino — the cyclical weather phenomenon responsible for higher global temperatures — returns to the Pacific, ABARES expects barley production to drop 24 percent to 10.8 million tonnes for the 2023-2024 harvest.
The reopening of the Chinese market could not have come at a better time, Cole said.
“A lot of our barley is classified as feed, but it is still suitable for beer manufacturing in China,” he said. “They use slightly different processes, and essentially it means we can get a premium for more of our feed barley.”
On average, barley destined for China is sold for “around 38 to 40 dollars a tonne between now and since the tariffs were lifted” and that amounts to “an extra 400 million dollars value for the Australia barley crop next year, even with a smaller crop,” Cole added.
SEMICONDUCTOR SERVICES: A company executive said that Taiwanese firms must think about how to participate in global supply chains and lift their competitiveness Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) yesterday said it expects to launch its first multifunctional service center in Pingtung County in the middle of 2027, in a bid to foster a resilient high-tech facility construction ecosystem. TSMC broached the idea of creating a center two or three years ago when it started building new manufacturing capacity in the US and Japan, the company said. The center, dubbed an “ecosystem park,” would assist local manufacturing facility construction partners to upgrade their capabilities and secure more deals from other global chipmakers such as Intel Corp, Micron Technology Inc and Infineon Technologies AG, TSMC said. It
EXPORT GROWTH: The AI boom has shortened chip cycles to just one year, putting pressure on chipmakers to accelerate development and expand packaging capacity Developing a localized supply chain for advanced packaging equipment is critical for keeping pace with customers’ increasingly shrinking time-to-market cycles for new artificial intelligence (AI) chips, Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) said yesterday. Spurred on by the AI revolution, customers are accelerating product upgrades to nearly every year, compared with the two to three-year development cadence in the past, TSMC vice president of advanced packaging technology and service Jun He (何軍) said at a 3D IC Global Summit organized by SEMI in Taipei. These shortened cycles put heavy pressure on chipmakers, as the entire process — from chip design to mass
People walk past advertising for a Syensqo chip at the Semicon Taiwan exhibition in Taipei yesterday.
NO BREAKTHROUGH? More substantial ‘deliverables,’ such as tariff reductions, would likely be saved for a meeting between Trump and Xi later this year, a trade expert said China launched two probes targeting the US semiconductor sector on Saturday ahead of talks between the two nations in Spain this week on trade, national security and the ownership of social media platform TikTok. China’s Ministry of Commerce announced an anti-dumping investigation into certain analog integrated circuits (ICs) imported from the US. The investigation is to target some commodity interface ICs and gate driver ICs, which are commonly made by US companies such as Texas Instruments Inc and ON Semiconductor Corp. The ministry also announced an anti-discrimination probe into US measures against China’s chip sector. US measures such as export curbs and tariffs
RSS