The Chinese Government imposed the duties on barley imports in May 2020 over what it claimed were concerns about the dumping of cheap grain.
But on Friday, it said that due to “changes in the market situation of barley in China” it was no longer necessary to continue with the crippling taxes on Australian imports.
The change was implemented on Saturday.
Australia will discontinue its World Trade Organisation dispute against China over the tariffs, a case it had suspended in exchange for Beijing agreeing to a review.
Three years ago, China imposed 80 per cent duties on Australian barley bound for the world’s biggest beer market.
The Chinese barley market took up to 70 per cent of Australian exports before the duties were introduced.
GrainGrowers chief executive officer Shona Gawel said the five-year dispute had cost the industry about $2.5 billion and the removal of the duties was welcome news.
“We’re hoping that the rebuilding of $1.2 billion annual trade is going to be a really positive one for our growers,” she said.
“The relationship with China has always been a really important one and I’m sure there’s a lot of companies wanting to pick that up and resume those strong links.”
National Farmers’ Federation chief executive Tony Mahar said scrapping these tariffs was welcome news for some 23,000 Australian grain producers who have been impacted by China’s actions.
“The Australian farming sector was always of the view there was no justification for these duties and that it was in both countries’ best interest for all trade impediments to be removed,” he said.
Victorian barley farmer Brett Hosking said the decision would have an immediate impact on grain growers, with increased demand from China likely to drive up prices.
“It gives growers a lot of confidence heading into harvest,” he said.
“There’s a lot of opportunity in the Chinese market, they have the most unquenchable appetite for Australian barley.”
The shift has also led to optimism in the wine industry that punitive tariffs on their products will also be dropped.
In 2021, duties of more than 200 per cent were applied to the majority of Australian wines exported to China based on allegations producers had been dumping stock in the market — claims the industry refutes.
Australian Grape and Wine head Lee McLean said the barley announcement was a positive step for the agriculture sector and the bilateral relationship.
“While there has been no change in the situation for Australian wine exports at this point, we hope this announcement may provide a template for removing import duties on Australian wine in due course,” he said.
The Federal Government will continue to pursue its wine dispute with the WTO, using the barley outcome as a template.
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