Miller Magazine Issue 146 February 2022

83 ARTICLE MILLER / FEBRUARY 2022 In 2021 and so far in 2022, Australia has been doing large volumes into China. This is due to our competitive- ness after the large crops. BARLEY Australia was a major supplier of barley to China up until the anti-dumping tariff was introduced. Since the tar- iff was introduced, France and Ukraine have been major beneficiaries. Russia, like in wheat, is insignificant in China’s barley imports (see Chart 4). The tariff is likely to persist for some time. China has likely paid more for barley than it would have if the tariff wasn't in place. The introduction of Russia provides Chinese importers with another source, and as we always say about Australian export trade – 'The more doors open, the better'. This equally applies if you are an importer. Russia may be more likely to increase market share, but in competition with other origins such as France/ Ukraine. RUSSIAN MARKETS FOR BARLEY AND WHEAT It is important to look into Russia and where they trade to. If Russia is already trading large volumes into other Asian nations, then that will give an insight into their com- petitiveness. Let's firstly get an insight into barley. Russian barley exports are dominated by five major destinations, which over the period 2016 to 2020 made up 79% of annual exports. The remaining 49 nations make up very small volumes. The other remaining 21% is comprised of 49 nations. The interesting point to note about these destinations is that Asian countries only represent a small proportion of the volume (<0.5%). This potentially points to Russian bar- ley being less competitive price-wise than other origins. WHAT ABOUT WHEAT? The wheat trade is a lot less concentrated than barley. The wheat trade from Russia is still heavily focused to- wards the top five, with 51% of volume. There is a larger volume of wheat headed to Asia than Barley, at 7.3%. This signals that pricing has worked well into Asia, at times. The majority of the barley and wheat traded by Russia goes to those where they have a geographic advantage. This is likely to continue. WILL THEY EAT INTO OUR SHARE? YES AND NO Tradeflows are about opportunity, and they are largely based on price. In recent times, China has been import- ing huge amounts of grains. It makes sense from their perspective to open up to the world and have as many doors open as possible. CHART 1 CHART 2 CHART 3 CHART 4