BEIJING / SYDNEY (Reuters) – China's commerce ministry said on Monday it had launched an anti-dumping investigation into imports of barley from Australia, its top supplier of the grain, amid strained diplomatic ties between Beijing and Canberra.
The move follows an application for a probe by the China Chamber of International Commerce, which says Australian barley was sold at a lower price than normal, squeezing domestic suppliers during the 12 months ended Sept. 30 this year.
Australia is by far China's top supplier of barley, used widely in brewing as well as for livestock feed. It exported 6.48 million tonnes in 2017, close to three-quarters of China's roughly 8.86 million tonnes of imports of the grain, worth about $ 1.5 billion, according to Chinese customs data.
The probe starts on Monday and will end within one year, with an option for an additional six months of investigation. It comes after a period of tense relations between Australia and China, when the previous Australian prime minister, Malcolm Turnbull, accused Beijing of interfering in its domestic affairs.
The two countries have also been vying for influence in sparsely populated Pacific island countries that control vast swathes of resource-rich ocean.
Australia's Minister for Trade, Simon Birmingham, and Minister for Agriculture, David Littleproud, did not immediately respond to requests for comment on the investigation.
The commerce chamber's request for an investigation said the volume of barley imports from Australia jumped 67 percent from 2014 to 2017 while prices slipped to $ 198.05 per ton, nearly a third below their 2014 level. The ministry will also look into whether domestic suppliers' business was damaged in the period from Jan. 1, 2014 to Sept. 30, 2018.
China's beer makers are major customers for Australian barley, although the grain is also used as a substitute for corn in livestock feed.
In early reactions, analysts were skeptical on the probe.
"It does not seem very credible that Australia has been dumping barley," said Phin Ziebell, agribusiness economist at National Australia Bank.
"Who is subsidizing the losses? It is a competitive market in which producers want to maximize their returns. I do not how that is served by dumping barley into China. "
Reporting by Dominique Patton and Hallie Gu in BEIJING and Colin Packham in SYDNEY; Editing by Kenneth Maxwell