Friday, 7 June 2019
In the Autumn/Winter 2018 edition of Grain Outlook, we reported on how China’s strict grain hygiene rules were holding back barley trade
The barley protocol, which was negotiated by AHDB in 2015 to allow the UK to export barley to China, is now being reviewed. In order to see just how big the brome problem is, 300 samples of barley are being surveyed for weed contaminants. Full results are expected in November, with a view to determine what levels of weed seed are justifiable and under what justification, as agreed by Defra and the UK trade community. This will then be presented to the Chinese plant health authorities (GACC).
Discussions with both the UK Department for International Trade in Beijing and Chinese companies revealed that the presence of sterile brome in potential shipments of UK barley to China is not as much of an issue as perceived by UK exporters.
Although a tolerance for the weed in grain shipments would not provide immunity altogether against inspection, the Chinese authorities and inspectorate do appear to take a pragmatic view of cereal imports. They do not necessarily inspect to tolerance stated in the legislation, provided the cereal samples appear healthy by visual inspection, with no major contaminants.
France successfully exports volumes of cereals to China, despite the zero tolerance for sterile brome and other weeds, as stated in their export protocols.
Cereals from the UK are of great interest to Chinese companies looking for alternatives to grain from the USA, Canada and Australia, and there is certainly a willingness to trade with the UK.
At the end of last year, China launched its first ever anti-dumping investigation against its main barley supplier, Australia, targeting barley exports. The investigation process into dumping, a practice where a producer sells a product to an export market at a lower price than it sells at home, is expected to last a year. In the meantime, no barley trade can take place between China and Australia.
Furthermore, the current trade dispute between the USA and China has created uncertainty over future supplies of wheat and barley to China. With China not currently importing any Australian or US grain, this has created opportunities for UK cereal exports to China.
Regardless of revisions to the existing export protocol between the UK and China, which could take some time, UK companies could begin to export small volumes of barley to China as a trial, to start exploiting this potentially great market.