Feed barley potential rises on the back of demand for malt barley in China

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A growing thirst for beer in China is opening opportunities for Australian barley growers to increase their exports.

But some hope it may also open the door for increased exports of lower quality feed grade barley.

China is the world’s largest consumer of food and beverages and is one of the fastest growing food and beverage markets in Asia.

According to global market research group Euromonitor International, Chinese expenditure on food and beverage products in 2016 is expected to reach US$976 billion.

Sales of mid-range and premium beers are growing, which groups like the Australian Export Grains Innovation Centre (AEGIC) hope will translate to more exports of Australian barley to China.

Australia is a dominant player in world barley export markets, representing more than 40 per cent of the world’s malting barley trade and 20 per cent of the feed barley trade.

China and Australia ‘mutually dependent’ barley markets

AEGIC chief executive officer Richard Simonaitis recently returned from conducting workshops in China with Chinese brewing and malting companies.

He said the workshops were intended to help Chinese brewers and malt processors understand the technical potential and value of the varieties, which included La Trobe, Flinders and Spartacus.

“Providing this type of in-market support is crucial to ensure Australian grain is well understood and valued by our major customers,” he said.

More than half of the malting grade barley grown in Australia currently goes to China.

“It takes about 30 per cent of the Australian crop, which is the biggest export destination for barley coming out of Australia by a long streak,” Mr Simonaitis said.

“It’s really quite a strong market for it, we’re mutually dependent on each other really. China needs Australia’s malt barley, just as much Australia needs that market.”

But a spin off of AEGIC and other organisations building relations with China around malt barley could be increased demand for Australia’s lower quality feed barley.

“There was a lot of enquiry about feed barley,” Mr Simonaitis said.

“There’s a very strong feed industry in China: they use a lot of corn, they use a lot of soybean meal, they use a lot of sorghum.

“They’re just starting to understand that feed barley can help buffer some of the mildly toxic effects that badly stored grain can have,” he said.

“It’s a calming additive if you like to go into the feed rations, which helps take away some of the impacts of poorly stored grain coming out of China.

“It certainly sounds like there is a good understanding of the value of Australian feed grain and of course feed barley is the one that we have a readily available supply of.”