Beijing ‘aims at CBH Group’s reputation’ with barley ban

Weed contaminants ‘well within the tolerances’ accepted by Beijing and Canberra, CBH finds.

Opposition agriculture spokesman Joel Fitzgibbon expected China to target more Australian products as Beijing and Canberra’s relationship continues to sour. Picture: AFP

Australia’s biggest barley exporter, CBH, says China banning shipments of its grain is an attack on its reputation rather than seeking to financially penalise the Western Australian co-operative.

CBH will challenge its import ban from Chinese customs, saying it had restested its grain shipped to China and found weed contaminants were “well within the tolerances” accepted by Beijing and Canberra.

The comments add fresh fuel to fears China’s targeting of Australian products is politically motivated after Prime Minister Scott Morrison spearheaded a push for an inquiry into the origins of coronavirus earlier this year, which Beijing’s deputy ambassador to Australia said had offended Chinese people.

The ban follows Beijing imposing punitive 80 per cent tariffs on Australian barley in May, which CBH chief marketing and trading officer Jason Craig had “effectively stopped” trading of the grain between the two countries, and the ban had more of a “reputation impact” than a financial impact.

Mr Craig said from October to April Australia shipped about 1 million tonnes of barley to China. Since May, shipments have plummeted to about 300,000 tonnes, most of which were pre-existing orders made before the communist regime imposed the tariffs after completing an anti-dumping investigation.

Trade has effectively stopped

“It was basically contracts that required execution. Since the tariffs have been introduced the trade has effectively stopped,” Mr Craig said.

“This (the ban) is not having an impact on price basically because the big impact has been on the anti-dumping, which did restrict trade.

“This is not about a financial impact. It is basically a reputation impact.”

Mr Craig said CBH had retested its cargo vessels and shipments and found they were well within the limits of what is deemed acceptable for export.

“We have talked with the Australian government and had these vessels retested. Our tests were very clear that we were within the tolerances for these weed seeds and we are confident that we have not gone over those tolerances.

“The tolerances are set between the Australian and Chinese authorities. These are assessed by the Australian government on export and that is to ensure that we are provided a phytosanitary certificate.”

Mr Craig said CBH had diverted much of the barley destined for China to Thailand, Japan and Saudi Arabia. “Australian prices are at export parity and are at prices that can compete in those markets”.

Belt and Road Initiative agreement

The bans follow Scott Morrison’s announcement on Thursday he would legislate to tear up Victoria’s multi-million-dollar Belt and Road Initiative agreement with Beijing and other agreements found to be against the national interest.

Diplomatic tensions have simmered for months after the Prime Minister spearheaded a push for an inquiry into the origins of the coronavirus, which spread from the Chinese city of Wuhan to the rest of the world from January.

Chinese customs said in a statement late on Tuesday it had suspended barley imports from CBH as harmful “pests”, referred to as weeds, were found in the product. China has notified Australia of the suspension.

“Recently, Chinese customs have successively detected Bromus rigidus, Avena ludoviciana, Aegilops cylindrica, Solanum carolinense, Emex australis, and Cernuella virgata, wheat streak mosaic virus and other quarantine pests from imported Australian barley,” the statement said.

“In order to prevent the introduction of harmful organisms, in accordance with the ‘Entry and Exit Animal and Plant Quarantine Law of the People’s Republic of China’ … the general administration of customs has revoked registration of Australian company CBH Grain Pty Ltd due to serious violations of the regulations, suspended its barley imports, and notified the Australian authorities of the relevant situation.”

Opposition agriculture spokesman Joel Fitzgibbon expected China to target more Australian products as Beijing and Canberra’s relationship continues to sour.

“There will be ongoing retaliation against the way in which the Morrison government has managed this relationship. We can expect more of this,” he said.

“I don’t know how we address it now because normally these issues would be responded to by establishing a dialogue with the relevant minister and their counterpart in China. The problem is this government has no relationship and is incapable of picking up the phone.”

Since imposing the 80 per cent tariffs on Australian barley, China has been buying up Ukraine grain, and Mr Fitzgibbon said that was at the expense of Australian trade.

“In the grains industry we look to the future about where our emerging competition is - which is beef it’s South America, with grains it’s the Black Sea countries. And of course the Belt and Road initiative is very much about connectivity with those Black Sea countries.

“We should never take a backward step in defending our national interest but we should not go out of our way to offend our biggest trading partner.”