The first shipment of barley has left Australian shores since China lifted its tariffs on Australian barley earlier this month.
The Majestic Island, which will eventually be carrying a shipment of around 66,000 tonnes of malt barley, left the CBH Kwinana Grain Terminal in Western Australia this morning headed for China.
Speaking from Kwinana, federal agriculture minister Murray Watt confirmed the first shipment had been dispatched from CBH's grain export terminal and was making its way to China.
Federal trade minister Don Farrell said the news was especially important for growers in Western Australia and South Australia, the two most export-focused barley producing states.
Mr Farrell said the resumption of trade was a "wonderful development" after the government had worked hard to stabilise relationships between the two countries.
He said he looked forward to a long, strong and continuing relationship with the Chinese government to make sure that Australian wheat and barley producers sell their product.
"I'm so pleased that we've managed to lift those tariffs and give the opportunity to the Chinese consumers, particularly the beer drinkers, to have some of the best barley in the world to make their beer," Mr Farrell said.
The resumption of trade comes after an extensive review period where China decided to lift the imposed 80.5 per cent tariffs on the grain.
The tariffs were imposed in 2020 and blocked exports to the Chinese market, worth about $916 million in 2018-19.
Barely markets have reacted positively to the announcement and CBH chairman Simon Stead said the news of the reopening of the Chinese market had given the farming sector a boost.
"We've seen barley prices kick by around $50 to 60 a tonne in the wake of the news China would drop its tariffs," he said.
"China is an important market for our barley and we are happy to see the trade resume."
Similarly, Clear Grain Exchange managing director Nathan Cattle said he experienced a "frenzy of demand" when it was announced that China would drop its tariffs - with 25 different buyers purchasing 115,000t of barley through Clear Grain Exchange on Friday, 4th of August.
Mr Farrell was delighted to make progress with Chinese counterparts on barley, but added there were now other trade priorities for the primary production sector.
He was confident that with the "good working relationship" the government had achieved, all restrictions will be removed in a short period of time.
"We still have more to do on commodities like wine, like lobster, like hay and a range of beef products," Mr Farrell said.
"We're working on those - they can take a bit of perseverance and take a bit of persistence and a little bit of time."
There are some concerns that with China's economy struggling, barley trade may not resume to what it once was.
Hong Kong's Hang Seng (HSI) Index has fallen more than 20pc from its recent peak in January, while the Chinese yuan fell to its lowest level in 16 years.
Despite this, Mr Watt said he was confident the barley trade with China could be restored to its former glory.
"It was a trade worth as much as $2 billion a year, obviously the Chinese economy is going through some difficulties but we are very confident we can get it back," he said.
China accounts for 80-90 per cent of malt barley produced in the Asian region and the sheer volume of the malting industry there means it is a critical market for Australia's barley exporters to unlock.
The Kwinana Grain Terminal is the largest grain terminal in the southern hemisphere and federal minister for resources Madeleine King was sure to remind everyone that the "world revolves around Kwinana".
