The war between Russia and Ukraine affected various aspects, but perhaps most strongly it affected the grain trade. In recent times, we have seen a "redrawing" of traditional trade routes and the use of tariffs as a means of dealing with the situation.

Yesterday, the Australian Grains Industry said it welcomed China's decision to remove tariffs on Australian barley. Recall that in 2020, Beijing imposed import duties on a range of Australian goods, from wine and red meat to lobster and timber, on the grounds that these goods were "dumping" on domestic production.

In fact, the real motives had to do with Australia's tough stance on the global COVID-19 pandemic and China's role in it.

Before the tariffs, Australia was China's largest supplier of barley. "Our barley exports to China peaked at 6.3 million tonnes in 2016-17 before falling to negligible levels after the tariffs were imposed in 2020, so we are very hopeful that this decision will allow to get our trade relationship and exports back on track," commented Pat O'Shanassi, CEO of Grain Trade Australia (GTA)

Following the imposition of the tariff, barley prices subsequently collapsed, prompting Australian producers to cut production in favor of canola and wheat. Prices slowly recovered as new markets opened up for Australian barley.

On Friday, China's Ministry of Commerce ruled "that it is no longer necessary to continue to impose anti-dumping and countervailing duties on imports of barley originating in Australia in view of changes in the Chinese barley market."

However, the decision is not so spontaneous, but has its own chronology. In April, Australia agreed to "temporarily suspend" its World Trade Organization complaint against China over its decision to impose 80.5% tariffs on Australian barley. This, along with complicated imports from the Black Sea, led Beijing to make its final decision on this matter.