Australian barley prices tumbled after China’s Ministry of Commerce launched an anti-dumping investigation into imports from Australia.
The probe was launched after the ministry received an application from the China Chamber of International Commerce, saying Australian barley had been dumped in the Chinese market at prices below fair value, according to an official statement.
The news broke on Monday and barley prices in Australia tumbled as traders pulled back buying ideas.
Many buyers chose not to post a barley price until the situation with China becomes clearer. Barley bids fell to $50 a tonne from Friday’s levels to $345 delivered Melbourne.
Sharp declines were also seen in other states. Western Australia’s CBH dropped its feed barley price to $285/t at Kwinana, down $30/t on last week.
Barley prices in South Australia also tumbled.
China is, by far, Australia’s major buyer of barley. Australia exported 6.5 million tonnes of feed and malting barley to China in 2017.
Export data shows that more than 60 pc of Australia’s barley exported headed to China last year.
Even before the anti-dumping claims, Australian barley prices have been listing in recent weeks amid the absence of Chinese demand.
It was expected that China would be a major buyer of Australian barley in 2018/19, but traders are saying demand has been very quiet.
The absence of export demand has been backed up by the sharp slowdown in China’s barley imports.
Chinese Customs data shows that barley imports for July to September were just 1.2 million tonnes, the smallest in six years.
Dumping claims by China seem far-fetched as it implies its being sold below global prices.
To the contrary, Australian barley has consistently traded at premiums to its major export competitors.
Some exporters named in the inquiry said they have never shipped bulk barley to China.
Some exporters named in the inquiry said they have never shipped bulk barley to China.
Australia’s Department of Foreign Affairs and Trade as well as industry groups said they are working with China to bring a resolution to the claims.
Wheat prices have also fallen on China’s anti-dumping claims on Australian barley. APW into Melbourne dropped $16/t tonne to $400/t delivered Melbourne.
However, exporter bids in Western Australia were largely unmoved, which suggests traders are finding overseas demand at current price levels.
There is no sign that Australia’s domestic demand is buckling under the current high grain prices.
The latest ALFA feedlot survey shows that cattle on feed numbers have continued to surge in the July to September quarter.
Cattle on feed numbers were 0.5 pc higher in the July to September quarter to a record large 1,126,666 head, ALFA said.
Queensland cattle on feed numbers climbed 4 pc to 652,074 head, the report showed.
ALFA President, Bryce Camm, said that 2018 had been a year dictated by east coast drought conditions which in turn had driven feedlot cattle inventory and grain fed beef exports to record levels.
Record large cattle on feed numbers were accompanied by continued strong export demand for Australian grain fed beef.
MLA reported grain feed beef exports in the July to September quarter at 83,222 tonnes swt, up 13 pc on the same period last year.
