Controversial tariff set to hit Tasmania’s barley growers

As China imposes its controversial 80 per cent tariff on Australian barley prices, Tasmanian growers are set to feel a hit in their hip pocket if the crop market continues to dive.

Tasmanian grain growers will be watching prices carefully after a controversial decision by the China to impose an 80 per cent tariff on Australian barley exports.

While Tasmanian barley is generally not exported to China, an overall reduction in barley prices, because of the export market issues, could see growers choose to plant less barley this year.

More than 4 million tonnes of Australian barley, worth about $600 million a year, is exported to China where it is used for beer production and stock feed.

The Chinese government said it has imposed the tariffs, which will last for five years, after accusing Australia of product dumping.

China has denied the decision is in response to Australia’s push for an independent inquiry into COVID-19.

China’s president Xi Jinping imposed the tariffs after Australia’s push for an independent inquiry into COVID-19 origins.

Federal Agriculture minister David Littleproud said the Government may consider referring the matter to the World Trade Organisation.

In Tasmania locally grown barley is mainly used as feed for dairy cows and some is also used in beer production.

Wheat is Tasmania’s biggest cereal crop making up about two thirds of the state’s production, while barley makes up approximately one third.

Tim Castle from Tasmanian grain trading company TAP Agrico, said barley prices have fallen by about 12 per cent over the past four weeks, which is something Tasmanian growers will be keeping an eye on.

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“I think people will definitely be looking at the crops and the different price margins,” he said.

In the past month barely prices have dropped from $276 a tonne to $243 a tonne.

“Most people are growing spring barley now... once the price gets to $200 a tonne farmers can’t make money out of it,” Mr Castle said.

Tasmania imports a significant amount of grain into the state each year to supply the state’s dairy, poultry and pig industries.

Mr Castle said while lower grain prices would benefit those industries, it may also mean less barley is grown in the state this season.

While other export markets can be found for Australia’s high quality barley, the premium prices paid in China has seen it become an extremely important market.

Mr Castle said he is hopeful the current trade tensions can be worked through.

“It’s my view that this is a starting trade position, not a final one,” he said.

Mr Castle said one of the bigger issues facing the cereal industry going forward is the fall in fuel prices and a reduction in ethanol production in the United States.

He said if corn which is used for ethanal production ends up on the feed market, it could have a significant impact on global cereal prices.

With current uncertainty, Mr Castle is encouraging cereal growers to look careful at potential risk management strategies they can use to handle their grain supplies.