Coronavirus investigation: China threatens Australian barley exports

Audio 02:02

By: Claire Fages Follow

Relations are tightening more and more between Australia and China. Canberra authorities supported the request for an international investigation into the origins of the covid-19 epidemic in China. And Australian barley producers may well pay the price.

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Beijing authorities threaten to impose up to 80% tax on Australian barley for dumping on May 19. Australia is far from being famous for its excessive subsidies. Since the end of 2015, under a free trade agreement with Beijing, it destined more than half of its barley exports to China, with zero customs duty.

China Sea, 5G and Covid 19… litigation is piling up

But diplomatic relations have deteriorated sharply between Beijing and Canberra over the months. The Chinese dumping investigation into Australian barley began a year and a half ago when Australia supported an American initiative in the South China Sea, the preserve of Beijing. Since then, litigation has multiplied: arrest of an Australian intellectual in China, exclusion of the Chinese operator Huawei from 5G in Australia, and recently closure of Australian territory to Chinese nationals for fear of the coronavirus. The dumping investigation comes to an end even though Australia has just called China to account for the start of the covid-19 epidemic.

Towards a boycott of Australian barley

Geopolitics is once again entering trade relations. The Chinese ambassador to Australia clearly evoked a boycott of Chinese consumers who "  might think twice before buying Australian wine or beef and before sending their children to study in Australia  ". However, he was careful not to mention Australian iron ore or coking coal, which was otherwise more strategic for Chinese industry.

Not necessarily a bargain for French barley

For the time being, the first victim of this boycott could be Australian barley. The Canberra government has a few days to try to resolve the situation while the Australian grain farmers are sowing. If the boycott materializes in a few days, it is not even sure that this is good news for competing barley, like French barley, we estimate at Agritel. China has been importing very little for a few months and that is why it is targeting this Australian product. After swine fever which decimated farms and which reduced the demand for feed barley, covid-19 caused the consumption of beer and therefore malting barley to collapse, in China as elsewhere.

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