Australian Cargo Ships Reroute to New Markets Amid Barley Trade Dispute With China

Some cargo ships will reroute barley deliveries, while some continue as normal, Qingdao, Shandong province, China, on Jan. 14, 2020. (STR/AFP via Getty Images)

Cargo ships loaded with Australian barley en route to China are rerouting to other countries as the steep tariffs imposed last week continue to disrupt trade agreements.

Australian farmers and exporters are upbeat about finding new trade partners for surplus barley as improved agreements are made with other countries. However, existing scheduled deliveries are encountering difficulties and are scrambling to dispatch at alternative destinations.

According to data from My Ship Tracking, cargo ship Eco Dynamic departed from Fremantle Port, near Perth, carrying about 20,000 tonnes of barley. The Malaysian flagged vessel was heading for China but had to redirect to Kagoshima, south Japan.

Last week Bloomberg News reported that The African Quail was on its way to Machong in south China but rerouted to Jebel Ali harbor near Dubai in the United Arab Emirates instead.

According to data from broker IKON Commodities and Bloomberg ship-tracking information, the vessel departed from Lincoln near Adelaide, stating that there are around five ships originally destined to China with Australian barley.

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• ‘We Do Have Other Buyers For Our Grain’: Aussie Barley Farmers in Response to China Tariffs

The Chinese Communist Party’s (CCP) 80 percent tariffs on Australian barley imports came into force on May 18 after conducting its inquiry into anti-dumping and subsidiary claims.

The Australian government and barley industry have jointly rejected the basis of the CCP’s claims.

GrainGrowers chairman Brett Hosking has said he wants to pursue diplomatic negotiations with China, then maybe appeal to the World Trade Organization.

“The first response before we do anything is to pursue diplomatic negotiations, and the next step to look at a domestic appeal within China’s legal system, and maybe the WTO after that,” Hosking said.

“We have 60 days from May 18 to lodge an appeal within China’s judicial system, and they have 90 days to respond.”

After more than a week of ignoring the trade minister’s calls, China’s Commerce Minister Zhong Shan has spoken about the harsh tariffs imposed on Australian barley. The Australian Financial Review Shan reported that Shan said the CCP had only launched one inquiry in 50 years compared with 100 probes into Chinese goods by Australia.

Senator Simon Birmingham, Canberra, Australia, May 14, 2020. (Sam Mooy/Getty Images)

In an interview with Sky News Federal Trade Minister Simon Birmingham was quizzed on the authenticity of his counterpart’s comments.

“Well this isn’t about keeping a tally or about doing things in a tit for tat way,” Birmingham replied.

He reiterated that every country has its anti-dumping system and that China’s claims have no evidence. He also indicated that the next steps could be a WTO appeal.

The evidence for the duty tariffs is yet to be made public.

China has also suspended beef imports from four Australian abattoirs after the federal government called for a global independent inquiry into the origins of the CCP (Chinese Communist Party) virus, commonly known as novel coronavirus.

As Australian barley exporters look to advance trade relations with Japan and countries within the Arabic region, they are also looking to make agreements with India and Indonesia.

A free trade deal with Indonesia is likely to come in to play in July. Australia is also in talks with the Indian government to open up a market for 500,000 tonnes in Australian malt barley.