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.