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02 Sep 2020 | 06:31 UTC — Singapore
Highlights
China suspends barley from CBH due to presence of weed
CBH says will challenge suspension
China to strengthen checks on wheat shipments
Singapore — China has suspended imports of barley from Australia's largest grain handler, CBH Group, according to a statement by the Chinese customs late Sept. 1.
China said the suspension is due to phytosanitary requirements on weed seeds not being met for multiple cargoes discharged into the country from the Western Australia-based bulk handler.
The ruling could further impact already strained bilateral ties.
Earlier this year, China slapped an 80% tariff on Australian barley following antidumping and antisubsidy investigations. The world's largest consumer of agricultural products also halted beef imports from five major Australian abattoirs.
While the new ruling does not immediately impact trade due to the existing 80% import tariff, it casts a shadow of uncertainty over Australian agricultural exports to China in future, trade sources said.
CBH Group will work with the Australian Government to challenge the suspension, a CBH spokesperson told S&P Global Platts Sept. 2.
"CBH has not found any evidence to support these claims. CBH confirms that all grain shipments to China have met all Government phytosanitary export requirements and is therefore very disappointed to hear of the suspension," the spokesperson added.
Chinese customs also said it would strengthen checks on phytosanitary requirements and carry out laboratory tests, if necessary, on imported wheat cargoes from Australia.
"It's anyone's guess [whether Australian wheat will be the next target] but I doubt it. COFCO bought it [wheat cargoes] and they make big margins," said an Australian trader.
Traditionally, China has been Australia's biggest overall barley market, taking around half of Australia's barley each season. But following the tariff imposition in May, malting barley exports tumbled 98% month on month to just 3,502 mt in June while no feed barley was exported in the month compared with 44,077 mt in May.
As for wheat, China has ramped up wheat imports from Australia in the current 2019-20 marketing year, which runs from October 2019 to September 2020, despite elevated prices due to the third consecutive drought year.
Between October 2018 and September 2019, China imported only 173,914 mt of wheat from Australia. But in the current season, China has imported more than 1.3 million mt of Australian wheat, according to latest export data available until June.
China is also heard to have booked a number of new crop wheat cargoes to be shipped out from December onward.
In the absence of China, Australian suppliers are looking for new homes for its new crop barley.
Attracted by current pricing, feed buyers in Thailand have switched to Australian feed barley from feed wheat, with 190,000 mt already booked for the new crop shipping between November and December, according to Platts trade data.
Japan, Thailand, Vietnam and Middle Eastern countries are expected to buy most of Australia's 2020-21 barley.
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