China-Australia relations: ban on US$400 million Australian wheat imports looms

Wheat exports from Australia are expected to join a list that already contains barley, sugar, red wine, timber, coal, lobster, copper ore and copper concentrates

The escalation in tensions between China and Australia started after Canberra pushed for an international inquiry into the origins of the coronavirus in April

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The value of Australian wheat exports to China rose to over A$560 million (US$394 million) in the year to June, according to the Australian Bureau of Statistics. Photo: Reuters

Published: 10:45am, 3 Nov 2020Updated: 11:35pm, 3 Nov 2020

China is expected to ban imports of Australian wheat, putting a A$560 million (US$394 million) trade in doubt, with the grain the latest to join a list of new blocks on Australian products, according to industry sources.

From Friday, barley, sugar, red wine, timber, coal, lobster, copper ore and copper concentrates from Australia, are expected to be barred from China even if the goods have been paid for and have arrived at ports. The ban on wheat is likely to follow, although a date has not yet been set, sources said.

It is understood that Beijing will communicate the bans to all Chinese state-owned and private traders by Tuesday. Traders who have already been notified said no formal document was issued nor were reasons provided.

The bans, though, came with a warning that Australian shipments would also be turned away if traders tried to circumvent the restrictions by re-routing shipments via a third party country, sources added, with Chinese authorities set to pay particular attention to certificates of origin.

Chinese importers have been told to obey these rules strictly and suspend all orders for commercial reasons

Trade source in China

“Chinese importers have been told to obey these rules strictly and suspend all orders for commercial reasons,” said a trade source in China familiar with the impending ban, who wished to remain anonymous due to the sensitivity of the issue.

“Shipments arriving at the port before Friday will be released, but those arriving after will stay at port. It does not matter if it is already in the bonded area.”

Chinese importers which have shipments of the first seven banned goods arriving after Friday have been told that they will have to bear the expense of any uncleared goods.

Alongside the new bans that were communicated verbally to some traders on Monday, on Friday, China also suspended imports from grain exporter Emerald Grain and ceased imports of Australian timber from Queensland due to the discovery of pests and other contamination.