Chinese Government visit to UK farms could increase British barley demand in China

Tuesday 28 July, 2015

Chinese Government visit to UK farms could increase British barley demand in China

The visit, hosted by the AHDB Cereals and Oilseeds Exports team (BCE), is an important step in a five-year project to remove trade barriers to China۪s rapidly increasing barley import requirements.  The 2 million tonnes imported by China in 2012 is forecast to be 6 million tonnes in 2015 so if existing trade barriers are removed, this could be a lucrative opportunity for grain producers and exporters.

At present, China will not import UK barley as there is no protocol۝ in place.  The protocol required currently only operates in six other countries: Denmark, France, Argentina, Australia, Canada and Ukraine, and the AHDB Cereals and Oilseeds Exports team (BCE) are working hard to add the UK to the list. They accompanied four Chinese government inspectors on a tour of the UK cereals supply chain to demonstrate how hygiene controls are enforced and how processes relate back to legislation so that export barley would be free from diseases, pests and weeds.  The tour included farms, stores and official testing laboratories and was hailed a success by all those involved, with the inspectors satisfied at the end of their visit.

The next step will be a written report by the inspectors which will determine the terms of the protocol.  Depending on the complexity of negotiations, the protocol could be in place within months although could be much longer than this.

China۪s increasing demand for barley is being caused by feed compounders wanting to replace large amounts of maize with barley in their animal feed rations, as a result of high domestic maize prices.  It is also thought that a growing taste in China for beer has led to increased requirement for malting-grade barley.  Annual Chinese beer consumption has risen from 17.4 litres per head in 2000 to 36.5 litres in 2013.

This will be good news with returns on UK cereal farms in decline over the past few seasons and low optimism for any improvement in farm margins in the coming season. 

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