The U.S. Consumer News and Business Channel (CNBC) reported on December 1 that Australia is at a disadvantage in a trade dispute with China, which has found an alternative source of supply for agricultural products such as the United States.
Andre Agapi, deputy director of agricultural pricing for Asia Pacific Energy Information, said in an interview with CNBC that China is currently importing a large number of agricultural products from the United States, including wheat, soybeans and corn.
Agapi said that as China seeks to replenish its inventory and reserves, China is “likely to buy more products”. He explained: “There is still room for more suppliers to get orders. This is not just a game involving the United States. China does not rely on wheat and barley from Australia. Instead, Australia needs China’s market more.
Agapi said that the demand for feed in China is becoming more and more vigorous, which would have bode well for Australian farmers. Australian farmers have just emerged from the drought for three consecutive years, and as crop yields increase, their products are cheaper and more competitive, and they are at a “fairly favorable competitive time to compete”.
However, in May this year, China imposed high import tariffs on Australian barley, which led to the squeeze of the crop out of the Chinese market. In late November, China imposed temporary anti-dumping measures against Australian wine, and the trade dispute between the two countries further expanded.
“Australia had to find other buyers for these goods, some of which were already at sea and were on their way to China,” Agapi said of the additional tariffs imposed on Australian barley. If China suddenly decides to stop imports and your export market is not diversified, exports will suddenly run aground.
Agapi said that this does not necessarily mean that there are no other buyers for barley in Australia. Australia’s barley and wheat have been “historically competitive” in Indonesia, the Philippines, Southeast Asia and even the Middle East.
“You can always find buyers,” said Agapi. “In essence, it’s a matter of price.”