Uncertainty continues from China anti-dumping investigation against Australian Barley

By: "Farm Tender" News
Cattle News
Mar 20, 2019
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Key Messages:

• China’s anti-dumping investigation against the Australian barley industry is continuing and the potential outcomes remain uncertain.

• Australian growers should be aware of this market risk as they approach the autumn planting period. Growers are encouraged to seek advice from their independent market advisors or consultants in relation to their grain marketing and crop rotation options.

The People’s Republic of China initiated an anti-dumping investigation regarding Australian barley in late 2018. The World Trade Organisation definition of injurious dumping is when exports are sold at a price lower than the exporting country’s domestic market, and/or lower than production costs which results in ‘injury’ to the importing country’s domestic production.

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Although the Australian grain industry is confident that dumping has not occurred, the likely outcome of this anti-dumping investigation is unknown at this point in time. Possible outcomes could include the imposition of provisional import measures such as securities or cash deposits on Australian barley exports to China. These measures have a similar impact as tariffs in that they artificially increase the price of Australian barley in China. Australian growers should be aware of this market risk as they approach the autumn planting period.

China is Australia’s largest barley export market and Australia is the largest supplier of barley to China. This investigation has created uncertainty within the Australian grain market, that has resulted in downward pressure on Australian barley prices. The organisations making this statement; the Grains Industry Market Access Forum, Australian Grain Exporters Council, GrainGrowers, Grain Producers Australia and Grain Trade Australia fully respect China’s right to conduct these investigations.

Australian exporters, industry bodies and government provided extensive responses to China’s Ministry of Commerce (MOFCOM) as part of the investigation. We are confident that the information provided confirms that:

* The claim of dumping, causing injury to China’s domestic barley industry is unsubstantiated;

* The Australian grain industry operates in an open, commercial and competitive global market; and

* The notion of dumping is not consistent with the commercial realities of the Australian grain industry.

The outcome of this investigation process remains uncertain, and several potential scenarios exist. The outlook is difficult to predict.

Australian grain growers should be aware of the potential risk of the imposition of provisional measures on barley exports to China as they approach the autumn planting period, which may have a consequential impact on prices.

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Growers should also be aware of the broad range of factors that may impact barley prices over the coming season. While the issues surrounding the China export market are uncertain, other factors would include issues such as global weather and plantings for grain crops in other countries.

Growers are encouraged to consider their specific circumstances and to seek advice from their independent market advisors or consultants in relation to their grain marketing and crop rotation options.

Joint Statement from:

* Grains Industry Market Access Forum

* Australian Grain Exporters Council

* GrainGrowers

* Grain Producers Australia

* Grain Trade Australia