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Barley barney escalates after China blocks Australian exporter

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China has suspended imports from an Australian barley cooperative after claiming it had found pests in the shipments, weeks after slapping Australian barley imports with an 80 per cent tariff amid growing trade and diplomatic tensions.

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CBH Grain Pty Ltd, which is based in Western Australia and is the nation’s top grains exporter, has confirmed it was notified by the Australian government it had been stopped from exporting barley to China, effective September 1.

The decision by China’s General Administration of Customs (GACC) was made – it said on its official WeChat account on Tuesday – after quarantine pests were found in its barley exports multiple times.

“In recent months, CBH was advised by the Australian government that GACC had notified them that several CBH barley cargoes, that had already been discharged in China, did not meet phytosanitary requirements,” the cooperative said in a statement to its 3,900 growers.

“CBH has not found any evidence to support these claims.

“The cargoes were all retested and it was confirmed that all cargoes met Australian government phytosanitary export requirements.

“CBH is therefore extremely disappointed the suspension has been put in place and will continue to work with the Australian government to challenge the suspension.”

CBH said the government was notified of China’s decision on Monday and it was advised on Tuesday.

Finance Minister Mathias Cormann said the federal government wanted to get to the bottom of the situation.

“We do respect the fact that China – like any other country would, like we would – has got quarantine inspection arrangements,” he told reporters in Canberra on Wednesday.

“We will be working with the company once we are aware of all the facts to make the appropriate representations.”

The move comes after China levied hefty tariffs on Australian barley cargoes and launched probes into Australian wine imports, amid worsening relations between Beijing and Canberra.

The 80.5 per cent tariff includes a dumping margin of 73.6 per cent and a subsidy margin of up to 6.9 per cent on all barley imported from Australia for five years.

The tariffs are in response to investigations initiated by China in November 2018.

Australia’s barley output – estimated at 10.2 million tonnes in the 2020/21 crop year according the US Department of Agriculture – dwarfs Argentina’s 3.5 million tonnes.

South Australia produced a little over 2 million tonnes of barley last season, about a quarter of the national production and is the second largest barley-producing state behind Western Australia.

China has also retracted CBH’s registration qualification for barley exports to China, according to the GACC notice.

Although Beijing’s move to suspend barley imports from CBH did not essentially affect trade, it shows that the relation between the two countries is not easing, traders in China told Reuters.

“Impact of removing it (CBH) is limited as we couldn’t bring in Australian barley already (due to the tariffs,),” a China-based grains trader said.

“But it is a signal, showing that Australian firms will be in an unfavourable situation. People will be rather cautious when buying Australian goods now,” said the trader, who declined to be named as he was not authorised to talk to the media.

Last week, it was revealed that China had turned to Argentina to supply some barley, which is used for beer and livestock feed.

-with AAP

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