Beer (Representational Image) | piqsels.com
Beer (Representational Image) | piqsels.com
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Winnipeg/London: As a barley battle brews in the Pacific Rim, Canadian producers are swooping in just in time to take advantage of China’s peak beer-drinking season.

Canadian barley shipments to China rose in May as the Asian nation slapped anti-dumping duties on the grain from Australia, its top supplier. Canada exported 175,500 tons of barley to China in May, up 38% from a year earlier, according to the Canadian Grain Commission.

Canada, the second-largest malt-barley exporter to China, had already been trying to win a bigger share of China’s beer market from Australia. The northern nation’s barley has higher protein than crops from Australia, and that quality helps in fermentation to give beer more body and foam retention.

The number of acres allocated to barley in Canada is set to rise to the highest in more than a decade in 2020, and any additional output could be absorbed by demand from China’s beer and livestock industries, said Errol Anderson, president of ProMarket Communications in Calgary. Canada is one of the world’s major barley producers and among the top exporters.

“Unfortunately, what’s happening to Australia will benefit Canada,” Anderson said by phone. “If China comes into the market, really those additional acres will be absorbed easily.”

Canadian efforts to ship more barley overseas have been successful, even before China’s tiff with Australia, said Tom Steve, the general manager of Alberta Barley. Production cuts in Australia due to drought in past years have helped Canadians boost shipments to China to about 1.5 million tons a year, he said.

“The challenge for us is to try and secure those markets longer-term,” Steve said.

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China is the world’s largest beer market, and consumers are increasingly shifting to premium and foreign brews from mass-market brands. Investors are expecting the sector’s recovery will continue in July when peak season for beer consumption starts. Inventory levels have been dropping while sales in venues like restaurants have continued to recover in the past few months, CCB International said this week in a report, citing checks with distributors and observations based on third-party data.

It’s not just Canada that’s eyeing China’s need for barley. Exports from France are poised to benefit from the Australian tariffs, and consultant Strategie Grains boosted its outlook for this season’s European Union barley shipments by 6% in a June report, citing higher projected sales to China. There have been multiple shipments of feed and malting barley loaded from France and destined for China in the past few weeks.

Prices in Europe and Canada are firm as a result. Feed barley in Saskatchewan has risen more than 8% since May and is currently at the highest price since July 2019, according to data from Farmco.

The potential for increased barley shipments comes at the same time as simmering tensions between Canada and China shrink demand for another major Canadian crop. Last year, China suspended the licenses of two major Canadian canola shippers, citing pest and quarantine concerns — though the move was widely interpreted as retaliation over the arrest of a Huawei Technologies Co. executive in Vancouver. Canada is the world’s top grower and exporter of canola, an oilseed used in everything from salad dressings to deep-frying.

“They haven’t picked on barley for politics, whereas canola is on the hit list,” ProMarket’s Anderson said.- Bloomberg


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3 Comments Share Your Views

3 COMMENTS

  1. China is playing Canada for the fools we are. While they have two innocent citizens locked up in a retalitory game of government sanctioned hostage taking and aggressively punishing us, they then turn to us to make up for imports while punishing another democracy for daring speak up.

    Cut all exports to this authoritarian regime Ottawa and develop our markets elsewhere before our dancing with the snake does irreversible damage

  2. China has shown their barbaric ,pathetic colors.They broke a signed agreement to respect Hong Kong laws perse Until 2047,wtf?Therefore changing laws that suit them to take over h.k completely,free speech there is dead Thanx to those bullies.Over amillion Muslims are in concentration camps,they are trying to threaten us Australians etc.You know what?To hell with China,we can do alot better in not having anything to do with them .They Cannot be trusted,period.

  3. Canada should stand in solidarity with Australia and not sell them our barley either.. the world needs to work together to squeeze china into playing fairly and quit trying to bully everyone

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