China grabs French and Canadian barley as pig herd grows again

Australia is the loser as Chinese traders find alternative sources of crops after diplomatic tensions led to imposition of a trade-sapping 80.5% tariff on the vital grain

China grabs French and Canadian barley as pig herd grows again
Lloyd Giles climbs up onto his combine during the annual barley harvest on a 160-acre field south of High River, in the Canadian province of Alberta. Much of Canada's 2021 crop has already been booked by Chinese buyers. Photo: Reuters.

(ATF) China is scooping up millions of tonnes of barley from France and Canada that have yet to be harvested, as its appetite for animal feed grain spills over into orders for next year's crop.

Chinese buying has contributed to higher prices for key crops and to food inflation worldwide as concerns about food security during the Covid-19 pandemic drive governments and industry to stock up.

Benchmark corn prices recently hit their highest level in more than seven years.

The feed barley export price was quoted as £176.50 ($240.60) per tonne for March loading, up £2 on the week, the UK Agriculture and Horticulture Development Board (AHDB) reported on February 3 in its daily grain bulletin. In the latest corn returns, feed barley April ex-farm was quoted as £170.40 per tonne, up £2.10.

China has bought huge volumes of foreign crops to feed a pig herd that is rebuilding after the deadly African swine fever epidemic led to the culling of hundreds of millions of hogs.

"Chinese demand is continuing to support feed grain prices," an AHDB commentary stated. "As China rebuilds their pig herd, feed demand for 2020/21 is seen to increase by 15.6 milllion tonnes from 2019/20."

GAINS FOR CANADA

A large amount of Canada's 2021 barley crop has already been booked by Chinese buyers, traders told Reuters, with one citing at least 1 million tonnes. That would be in line with at least 1 million tonnes of new-crop European barley thought to have been sold so far, traders said.

Some said France would supply the European volume, with one trader putting French sales at up to 2 million tonnes, although others said the sales were on an optional basis and could be sourced partly from Ukraine. Shipment would be mainly over July-September, traders added.

Beijing is aiming to plug a gap in supply after diplomatic tensions with Canberra led to the imposition of a trade-sapping 80.5% tariff on Australian barley.

A series of decisions has seen Australia-China tensions grow, and increasingly spill into the trade arena. This year, China introduced tariffs and quotas on, or halted, the importation of Australian barley, as well as beef, timber, wine, lobsters and coal.

China's tariffs have slashed Australian barley shipments, handing opportunities to other, more remote suppliers.

Australia announced in December 2020 that it would seek to bring a case before the WTO's dispute resolution process over Chinese tariffs on Australian barley, a move that highlights the increased tensions between the two countries.

With reporting by Reuters

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