Barley market: Australia targets Latin America

Australia is planning a coup to replace North American growers as a major source of Latin American barley after the Chinese tariffs.

Australia is looking to capture a big share of the Latin American malting barley market as quantity and quality of supply from North America slumps.

The Australian Export Grains Innovation Centre showcased the merits of Australian malting barley to South American suppliers this week and is expecting new markets in Latin America to be “quite valuable” to Australia in the months ahead, AEGIC barley markets manager Mary Raynes said.

Ms Raynes said the agency was particularly looking to Ecuador, Brazil, Colombia, Mexico and Peru to take up some of the supply.

“We’re going to get the biggest uptake of barley imports in the countries that have the large brewing capacities of the global beer brands such as AB InBev and Heineken,” Ms Raynes said.

South American markets were particularly promising this year because the drought in North America meant a lower quantity and quality of malting barley from traditional suppliers in the northern states, Ms Raynes said.

After droughts have affected much of North American barley growing land, Australia is in prime position to capture the Latin American brewing market as a main source of malting barley. Picture: Supplied

The agency has been working hard to replace the Chinese market, which imported 3 million tonnes of Australian malting barley annually until 2019 when the Chinese government imposed an 80 per cent tariff on Australia, effectively halting trade.

“These days, there’s not one country that is going to be able to replace the quantity of barley that China used to import out of Australia,” she said. “But at the moment, Latin America looks to be one of the larger importers of Australian barley.”

Western Australia’s CBH Group sent its first cargo of malting barley to Mexico in January.

CBH chief marketing and trading officer Jason Craig said at the time the deal showed changes in the international trading landscape, with efforts to develop new markets for West Australian barley were proving successful.

There were still some limits on Australian exporters accessing some South American markets, but the Australian government was working with the Colombian government to find a resolution to the tariffs on Australian barley going to Colombia, Ms Raynes said.

Australia is set to produce 11.72 million tonnes of barley this harvest, according to the latest forecast from Rabobank.

The figure is slightly below last year’s total of 13.05 million tonnes, but above the five year average.