China Ratchets Up Australian Trade Tensions With Barley Ban

© Reuters. China Ratchets Up Australian Trade Tensions With Barley Ban

(Bloomberg) -- China gave a further twist to escalating trade tensions with key commodity supplier Australia on Tuesday, halting barley imports from the country’s biggest grain shipping company.

The world’s largest consumer of agricultural products suspended imports from CBH Grain Pty in Western Australia because harmful weeds were found in the cargoes, according to a statement from Chinese customs. Australia has been notified of the decision, it said.

The move is the latest in a flurry of Chinese actions against Australian exports, coming just a day after China announced an anti-subsidy investigation into the country’s wines, which itself was less than two weeks after it said it began an anti-dumping probe into the same product.

Ties between the trading partners have become increasingly frayed. In addition to banning Huawei Technologies Co. from participating in Australia’s 5G network, Australia’s push for an independent inquiry into the origins of the Covid-19 outbreak has sparked a Chinese backlash.

China halted some beef imports earlier this year, with a fifth meatworks banned from shipping product there just last week.

CBH, Australia’s largest barley exporter, will work with the government to challenge the suspension and has not found any evidence to support the claims, a spokesperson said.

“CBH confirms that all grain shipments to China have met all government phytosanitary export requirements and is therefore very disappointed to hear of the suspension.”

Australian Finance Minister Mathias Cormann told reporters Wednesday that CBH had a reputation for providing “high quality grain products.”

Once the government knows more details of the ban, it would work with the company to make the appropriate representations to China, Cormann said. The government respects the fact that China has quarantine inspection arrangements, he added.

Australia’s barley shipments to the Asian nation have already been slashed after China imposed tariffs of more than 80% on imports of the grain earlier this year following anti-dumping and anti-subsidy investigations. Australian growers have reduced barley planting in favor of wheat following the tariffs.

China has been buying hefty amounts of U.S. corn, partly as a way to replace the Australian barley supplies. Now, barley from Australia is among the cheapest in the world after the tariffs were imposed.

The Chinese ambassador to Canberra said in April that Chinese consumers might choose to boycott the nation’s exports because of strained relations.

(Updates with comments from Australian finance minister from 8th paragraph)

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