November 20, 2014
The recent free trade agreement signed between Australia and China will eliminate a 3% tariff on barley and a 2% tariff on sorghum, millet, and buckwheat, however wheat, canola, cotton, rice, and oilseeds have broadly been excluded. Based on 2013 data, Australia ships 7 million tons of grain to China per year worth $2.1 billion. And given the tariff eliminations for barley and sorghum, the free trade agreement could provide a boost of $13 million however, the largest commodities of wheat and canola were not please at being excluded from the deal. Given Chinese consumer’s changing tastes and increasing demand for beer, and China’s domestic barley production falling from 3 million tons three to four years ago to 600,000 tons today, demand for Australian barley is expected to increase. In addition, the removal of tariffs on live cattle exports, sheep meat, and beef over the coming year should have an indirect positive impact upon the wider grain and oilseed industries as a whole.
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