Grain sector continues to diversify trade options as hopes for canola exports into China remain

Hopes for a renewed trade partnership for canola exports to China are growing with the agricultural industry remaining committed to diversifying trade options.

Speaking at the WAFarmers grain conference in Albany on June 26, Grains Australia chief executive Richard Simonaitis discussed the importance of markets in South-East Asia for WA grain growers and impacts of geopolitics and shifting production priorities among farmers.

He said China continued to be a major buyer of Australian wheat and barley with growing hopes of a renewed trade pathway for canola exports.

It comes after the first cargo shipment of 65,000 tonnes of Australian canola from the Port of Esperance cleared inspection earlier this year in a trial — the first such shipment in several years.

China’s ban on canola exports in 2020 came amid a high-profile trade war with Australia, which targeted a raft of products including barley, wine, cotton, coal, lobster and beef.

The East Asian giant claimed it had detected blackleg disease in shipments — ending what was once a $1.7 billion per year trade between the two countries.

Before the ban, China bought between 20 to 30 per cent of all Australian canola.

“We’re that close to having open access for our canola in China, and that’s incredibly important,” Mr Simonaitis said.

A report from Australian Bureau of Agricultural and Resource Economics and Sciences found the value of Australian canola exports was expected to fall in 2026-2027 by 14 per cent to $3.7 billion.

Mr Simonaitis said the Middle East conflict would have a knock-on effect to grain export prices and demand into the SE Asian markets as rice and vegetable farmers were unable to afford the cost of fertiliser, unlike Australia who could afford the prices.

“That will suppress their economies, and we need to understand what the flow-on impact of that is going to look like for Australia with those countries as significant markets for us,” Mr Simonaitis said.

However he said staple foods, such as grain, were often the “last thing to come off the shopping list”, with demand to structurally remain despite downturns.

“These economics (in South East Asia) are still growing, their populations are still growing but it’s not the same across all the market segments so there is growth in both food and feed, but the feed markets are growing faster,” Mr Simonaitis said.

Also speaking at the conference, CBH chief marketing and trading officer Paul Smith said it had hosted more than 200 international visitors in WA from SE Asia, the Middle East, Europe, and the Americas in an effort to understand their changing requirements and needs in the grain supply chain.

“Those relationships are what create demand, and demand underpins value,” he said.

“When China imposed barley tariffs in 2020 . . . it was those relationships across other markets that allowed us to redirect WA barley and keep it moving.

“By the time tariffs were lifted in 2023, WA barley had a far more diversified customer base than it had three years earlier — that diversification didn’t happen overnight.”