Barley supply flows are changing due to trade conflict

Barley from Argentina replaces the loss of Australian barley in China, which is subject to extremely high import duties due to political upheavals. This is changing delivery flows around the world. This can also affect German barley exporters.
Argentina is in the process of shipping at least 250,000 tons of barley to China this year; 380,000 tons are expected in 2021. In 2019, almost no barley was sold to China from there.
China is interested in Argentine barley because Beijing is fighting with Australia. China has been imposing extremely high anti-dumping tariffs on Australian barley since May of this year. In the last two months, 160,000 tons of barley from Argentina have already been shipped for China. In these days a ship will be loaded with 65,000 tons.
The barley is used in China as animal feed and as brewing barley. Some experts expect that in 2021 even 800,000 tons of barley from Argentina will be bought by China, the amount depends on the further course of the trade dispute between Beijing and Canberra.
Now traders in Australia are trying to find other buyers for their barley on the world market.That could be Saudi Arabia, which feed their camels with barley - or countries in South America that are otherwise served by Argentina with brewing barley.
Saudi Arabia is the most important sales market in EU third countries for German barley exporters.
In Argentina, barley is sown in June and harvested in December. What has been shipped to China so far is still from the 2019/20 harvest.
The best soils for growing grain in Argentina are in the pampas. This region is as big as France. Should China be interested in Argentine barley beyond 2021, then the area under cultivation could be expanded at will.
This year's barley harvest in Australia is estimated by the USDA at 10.2 million tons, the harvest in Argentina of 850,000 million hectares is estimated at 3.5 million tons. In contrast, wheat is grown there on 6.35 million hectares. But that could change now if the Chinese want it that way.

Hansa Terminhandel GmbH
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