The paperwork required for the UK to export barley to mainland China has finally been signed off, opening up a market which AHDB estimates could be worth £20m a year.
Demand for barley in China has been growing fuelled by a large and fast-growing beer market while domestic production has, at the same time, been in decline.
In total, the Chinese are looking to import seven million tonnes of barley this year.
AHDB head of crops export trade development Rob Burns said it was difficult to quantify how much grain the UK might export to China, although initial AHDB estimates are around 150,000t.
In addition to a growing beer market, the country had an up and coming whisky industry and it might want to source Scottish malting barley given it was so associated with the product.
“Our export team worked for years to gain access to the market and now we have opened the doors, it is a market that can be developed,” he said.
Phil Garnham, malting barley specialist for Fengrain, said China could represent an enormous opportunity for the UK, although it was unlikely any loads would go before August or September 2017 because the market was tighter following poor harvests in several EU countries.
It was not yet clear what quality the Chinese would be seeking, but the UK was well-placed to take advantage of any trade as it, along with Denmark, was one of the few EU countries with good quality this season, he said.
Gleadell sales director Stuart Shand said industry representatives had worked hard for the UK to become an approved supplier to China.
However, while the company had sold malting barley to China in the past and expected to again at a point in the future, it would probably not happen immediately.
“I don’t think it will be this year and possibly not next,” he said “This year there is less barley available in the EU because of a poor harvest in countries like France and Germany. This means there is increased demand for UK malting barley and it is more likely to go to traditional homes [within Europe] rather than China.”
The EU malting barley market is quiet at the moment with brewers and distillers not yet feeling the pressure to purchase fresh supplies. However, the tighter market for quality grain has meant prices had moved up.
Spring barley is currently making £140/t ex-farm for October onwards, which is a £35-£40/t premium over feed barley values.