Diversification of China’s barley imports is conducive for market balance
Published: Feb 04, 2021 09:04 PM

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Driven by rising consumer demands for meats, China is ordering millions of tons of barley from France and Canada to raise livestock in 2021, Reuters reported on Thursday, adding that China's tariff on Australian barley favors the world's other suppliers.

While the report is yet to be confirmed, it's certain that China's increasing barley purchases amid a steady economic recovery from the impact of Covid-19, will provide strong support for the global barley market. In addition, the diversification of import sources will be conducive to ensure domestic market stability and to balance competition in international market.

China's economy has continued its recovery. As domestic economy continues to gain momentum and livestock production is rebounding after the African Swine Fever epidemic, barely demand is also growing. It's no surprise that China will largely increase barley imports.

Recent Chinese purchases have reportedly contributed to higher prices for key crops and China's increasing barley purchase will ensure sales for foreign agricultural producers.

The world is amid a once-in-a-century shift brought by the COVID-19 pandemic and rising protectionism. As the second largest economy in the world, to maintain food imports security, it's critical for China to move toward diversification when it comes to critical imports. .

The diversification of Chinese purchase will also be good for international market to reach balance. Through reducing overdependence on single country, China can buy high quality and inexpensive products, which is conducive for China to spread risks to maintain domestic food security. 

Some analysts have deemed Chinese barley purchases from Canada and France as aiming to plug the gap left by Australian barley, but China has increased barley imports from countries outside of Australia for strategic reasons as part of a regular market adjustment. 

Australian barley exported to China in recent years has become the subject of an ongoing dumping investigation, China has imposed tariffs of more than 80 percent on Australian barley as a result of anti-dumping and anti-subsidy investigations that began in 2018. Responding to Australia's WTO appeal, China's Commerce Ministry said that China has always pursued trade remedies consistent with WTO rules.

The shortfall created by decreased Australian barely imports will not affect China's overall supply. Although the import demand of Chinese barley has increased greatly, in fact, this diversification of imports is also expanding continuously. China doesn't only rely on this Australian market, but also the entire international market. The international supply is relatively sufficient.

China's increasing barley purchases will play positive role in global barley market. The strong demand will inject power into global agricultural market and economic recovery. The large amount of purchase will directly increase income of barley producers in relative country to endure the COVID-19 crisis.

The author is a professor and head of the Economics and Trade Department with the College of Economics and Management at China Agricultural University.

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