WHILE Australian barley exporters are expected to find a home for any surplus barley in spite of newly imposed Chinese tariffs, the magnitude of the task is revealed when looking at Australian Bureau of Agricultural and Resource Economics and Sciences (ABARES) export data over the past eight years.
The industry has been upbeat about its ability to find alternate markets to replace the Chinese market, which has bought around 4.5 million tonnes on average over the past six seasons, citing a low dollar and current prices low enough to attract international interest but the statistics show no one market could absorb anything like the volumes of China.
You have to go back to 2012-13 for a year where China did not buy less than 3.5 times as much barley as the next largest purchaser.
Other major destinations since 2010 include Saudi Arabia, Japan and South Korea, while in recent years the Thai and Vietnamese markets have grown markedly, however apart from China only Japan and Saudi Arabia have ever bought more than a million tonnes of Australian barley in a single marketing year.
Saudi Arabia is a swinging market, having bought as much as much as 1.9m tonnes in 2011-12 to nothing in both 2014-15 and 2017-18 when it sourced its needs out of the Black Sea region.
It is also unique among major buyers, as a staunchly Muslim nation that all its requirements are for food or feed grade barley and there is no requirement for malt standard grain.
Other smaller Arab nations such as Kuwait and the United Arab Emirates are often in the top ten buyers of Aussie barley, meaning the Middle East is an important target market for Australia.
Rabobank senior grains and oilseed analyst Cheryl Kalisch Gordon said tariffs would not present a major problem into these markets.
She said Australia had free trade deals with Japan and South Korea which kept tariffs and duties to a minimum, although the South Korean tariff is still high after the initial 11,000 tonne quota, although coming down each year as part of the Korean - Australian Free Trade Agreement (KAFTA).
In south-east Asia Dr Kalisch Gordon said trade deals meant Australia had good access with little in the way of addition imposts, while in Saudi Arabia, which has changed its policy away from attempting domestic food security due to its harsh climate, there are subsidies in place for food importers.
In terms of quality concerns, Japan and South Korea are more prepared to pay premiums for high grade produce, while south-east Asian nations are more price sensitive.
The story Stats show barley sector will struggle to replace China first appeared on Farm Online.