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China beer brewers abuzz as Aussie barley returns

STORY: China's craft brewers are feeling a happy buzz, and it's thanks to Australian barley.

The produce is back on their ingredients list after heavy tariffs were lifted last month.

Beijing had imposed the duties back in 2020, in what some saw as retaliation for Australian allegations over the global health crisis.

Now the return of the barley is especially welcome for brewers of craft beers, who are hoping for a much-needed reduction in costs.

Miller Meng is a Shanghai brewmaster:

"I believe that everyone will definitely like and welcome the return of Australian barley to the Chinese market."

China is the world's largest beer market.

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It is expected to be worth $125 billion this year, according to Statista.

But in the absence of Australian malting barley, many Chinese craft brewers turned to alternatives, and that didn't come cheap.

"Australian barley could not be imported into the Chinese market for a rather long period of time. This is not very friendly to craft beer because we have to use more expensive barley, for example Canadian and French barley."

Over the three years prior to the tariffs, Australian government data shows China bought between 86% and 91% of Australia's malting barley exports.

Those shipments sometimes accounted for more than half of Chinese demand.

Australian malting barley is currently offered at $350 per metric ton, compared with $390 for French barley, which is also more costly to ship.

Shaun Rein is the Managing director of China Market Research Group:

"I expect there is going to be more tariff removals in the coming months and coming years, such as Australian red wine. So I'm actually quite bullish on Australia-China trade. I think you're going to see, maybe not a return to 2017 numbers, but I think there's a possibility of a return to 2019 numbers."

For Australia barley farmers, the re-opening of the Chinese market is naturally a boon.

Much of the product that once would have gone to China, had in recent years become low-priced feed for camels, sheep and goats in Saudi Arabia.