CHINA’S decision to scrap tariffs on Australian barley is set to shake up global trade, with the return of the supplier heating up competition with other exporters for a chunk of the world’s biggest import market.

Australia once supplied as much as 70% of China’s barley imports before China slapped hefty duties on the country’s shipments in 2020, cutting off a market worth more than A$1 billion (US$660 million) a year.

China shifted to buy more of the grain from France, Canada and Argentina in the past three years, while Australia sought alternative markets, such as Saudi Arabia.

“Currently, the price of barley in China is determined by the cost of barley in France plus freight charges,” said Stefan Meyer, senior cash grains broker at StoneX Group in Sydney.

With australia “being significantly closer to China, this could potentially reshape the market dynamics,” he said.

China last week scrapped tariffs on Australian barley in a further sign of improving bilateral relations. The country imposed duties more than three years ago. (SD-Agencies)