Australia: Barley exports bound for destinations new and old in absence of sales to China

Australia is one of the world’s top exporters of barley, though its ranking in recent years has depended heavily on weather and its effects on production. Australia exports both malting barley and feed barley, with feed barley dominating the volume in years when exportable supplies are abundant. After several years of drought, barley production has recovered, and exports are expected to increase over the 2020/21 marketing year (Nov – Oct), USDA said in their February report.

Malting barley exports fluctuate less than exports of feed barley. In the last 5 years of complete data, Australia’s malting barley exports averaged about 2 million tonnes, whereas feed barley ranged from 1.7 to 6.3 million tonnes. A look at a 5-year average of barley exports by quality and destination shows the importance of China as a market. This makes China’s imposition of a combined 80.5 percent tariff on Australian barley in May 2020 significant, as Australia’s production rebounds in 2020/21 after several years of drought.

Due to Chinese tariffs, Australian barley exporters have had to look for new homes and old partners around the world. Aiding in this search is the current price competitiveness of Australian barley; export quotes out of both Western and South Australia are lower than the world average of corn export quotes.

Strong volumes to Kuwait, Saudi Arabia, and the United Arab Emirates in 2015/16 and 2016/17, driven by low prices, have dropped sharply in recent years. However, Australian exporters are hopeful for a return to Middle Eastern markets, which have shifted to imports from Argentina, the European Union, Russia, and Ukraine. In one indication that these hopes could be realized, Australia barley exports to Saudi Arabia in November and December 2020 totaled nearly 400,000 tonnes in contrast to the 66,000 tonnes for the entirety of 2019/20.

Thailand has also developed an appetite for Australian feed barley, with feed barley exports to Thailand exceeding those to China in 2019/20.

With recent news reports indicating that a shipment of malting barley was sold to Mexico for the first time, it appears that Australian barley exporters are actively taking steps to fill the gap left by China.

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