Canadian barley farmers see price advantage due to China-Australia trade tensions

Alberta farmers reap benefits from China-Australia tensions
WATCH ABOVE: As China imposes harsher tariffs on Australian barley, the country has shifted to importing more Canadian barley product. Alberta barley farmers say they are already seeing the benefits. Emily Olsen reports.

As political tensions rise between China and Australia, Canadian barley producers are reaping the benefits with an uptick in exports this summer.

Due to the harsh tariffs and trading tensions from outside markets, one southern Alberta farmer noted his crops have been in high demand this season — both locally and internationally.

“There’s been a price spike because of it,” John McKee said.

“Unfortunately, I understand the reason is political, not because somebody really wants our high-quality barley.”

Read more: China won’t respond to pleas to ease tension after call for coronavirus probe: Australia

Tensions first arose between the countries when Australia asked for a coronavirus probe into China. As part of its perceived retaliation, China effectively ended imports of Australian barley by putting tariffs of more than 80 per cent on the crop, and has now shifted its focus to the Canadian market.

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“It’s opened up a price advantage right now to sell some new crop barley at a higher price,” McKee said.

The Canadian Grain Commission reported that international exports of barley more than doubled from April to May of this year — largely due to Chinese interest.

Tom Steve, the commission’s general manager, noted the new gap in the market is good for Canadian farmers looking to expand their business amid the hardships brought on by the COVID-19 pandemic.

“In 2019-20, Canada will export just over one million tonnes of malting barley to China for beer production, with the balance as feed barley,” he said.

“This will be an opportunity for Canada to show the quality of our product to new Chinese buyers. If they know we have a good product and we are consistent in delivery, then we can expect they will keep buying our barley in the long term.”

Read more: China advises citizens not to visit Australia as relations sour

McKee noted that this isn’t the first time that trade tensions have impacted local farmers. In 2019, China blocked Canadian canola after political tension bubbled over the arrest of a Huawei executive in Vancouver.

As a result, McKee said that many of his neighbors made barley more prominent in their crop rotations — a move that has paid off this year.

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“Politics has entered and we happen to be on the better end of that deal right now,” McKee said.

However, while Canadian farmers may currently be reaping the benefits of China’s political unrest, some are worried about what the political future might bring to the Canadian market.

“There’s no question that China is playing political games with Canada’s commodities,” John Barlow, vice-chair of the Standing Committee on Agriculture and Agrifood, said.

“Unfortunately, many of these things are politically driven, they are not about the commodity.”

Read more: China warns of ‘continuous harm’ to relations with Canada unless Meng Wanzhou is released

Barlow added that, in the larger picture, agriculture has been flagged as a key re-launch industry with post-COVID-19 global food shortages looming.

“Canada is well-positioned to take advantage of those markets that may be available to us that we have not accessed before,” Barlow said.

“But to do that we have to ensure our producers are on strong financial footing, that we have a good harvest and reliable infrastructure.”

— With files from the Associated Press

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