3/3
© Reuters. Craft beers are pictured at a bar in Shanghai, China September 20, 2023. REUTERS/Aly Song
2/3
AUD/USD
+0.56%
Add to/Remove from Watchlist
Add to Watchlist
Add Position
Position added successfully to:
Please name your holdings portfolio
Type:
BUY
SELL
Date:
Amount:
Price
Point Value:
Leverage:
1:1
1:10
1:25
1:50
1:100
1:200
1:400
1:500
1:1000
Commission:
Create New Watchlist
Create
Create a new holdings portfolio
Add
Create
+ Add another position
Close
DU
-0.18%
Add to/Remove from Watchlist
Add to Watchlist
Add Position
Position added successfully to:
Please name your holdings portfolio
Type:
BUY
SELL
Date:
Amount:
Price
Point Value:
Leverage:
1:1
1:10
1:25
1:50
1:100
1:200
1:400
1:500
1:1000
Commission:
Create New Watchlist
Create
Create a new holdings portfolio
Add
Create
+ Add another position
Close
By Casey Hall and Dominique Patton
SHANGHAI/BEIJING (Reuters) – The return of Australian barley imports to China has brought a happy buzz to at least one industry – brewers of craft beers who are hoping for a much-needed reduction in costs.
The last three years have not been good to China’s nascent craft brewing sector. First, the pandemic kept customers away from bars and then the Chinese government in 2020 imposed heavy anti-dumping tariffs on Australian barley and wine, widely seen as retaliation for calls by Canberra for an inquiry into the origins of COVID-19.
The barley tariffs were dropped last month after an easing in trade tensions. That will help lower costs for all brewers in China, but particularly craft beer brewers who use pure malt and don’t add other ingredients such as broken rice or starch, making their products more expensive.
In the three years prior to the tariffs, China bought between 86% and 91% of Australia’s malting barley exports, Australian government data shows. Those shipments sometimes accounted for more than half of Chinese malting barley demand, depending on the year.
“The return of Australian barley means everyone will be happier,” said Miller Meng, brewmaster at Shanghai craft beer bar, The Brew.
“Australian malt in the market return prices back on the right track,” he said. “With no Australian malt available, the prices of other malts has become crazy.”
There are currently more than 13,000 craft beer-related businesses in China, research from EqualOcean International shows. Some such as Tianjin-based Trueman Brewing and Inner Mongolia-based Mahanine Brewing are producing global award-winning brews.
China is the world’s largest beer market, expected to be worth $125 billion this year, according to Statista, and until 2020, craft brewers had been a thriving pocket of the industry.
But in the absence of Australian malting barley, many Chinese craft brewers turned to alternatives such as French or Canadian malt. Options equivalent in quality to Australian barley didn’t come cheap, particularly after Russia’s invasion of Ukraine sent grain and shipping costs spiking worldwide and crops were hit by unfavourable weather.
That meant a perilous thinning of margins and the hope is that Australian imports will reverse this trend, craft brewers told Reuters.
Australian malting barley is currently offered at $350 per metric ton compared with $390 for French barley, while freight from Australia to China is about $25-30 per ton compared with $35-45 from Europe, according to Yang Zhenglong, China general manager at malt making firm Malteurop.
About 300,000 tons of Australian malting barley has been contracted for sale to China since the tariffs were dropped, he added.
For Australia barley farmers, the re-opening of the Chinese market is naturally a boon. Much of the barley that once would have been diverted towards Chinese beer production had in recent years become feed barley for camels, sheep and goats in Saudi Arabia which is sold at lower prices.
Matthew Jimenez, continuous improvements and innovations manager for Belgian brewer Duvel Moortgat in Tianjin, said he expects demand for Australian malting barley to pick up over the next two years.
“It has been discussed in the chat groups I am in with other brewers. Australian barley coming back to China is exciting.”
Source: Investing.com