BEIJING/SYDNEY – China’s wheat buyers are scrambling to source low-gluten wheat for the country’s booming fancy bakery market, traders said, as exporters in key supplier Australia shy away from striking sales deals amid escalating trade tensions.
The unusual move by Australian exporters to hold back from offering grain in the Chinese market comes even as the country harvests one of its largest-ever crops while demand from the world’s second-biggest economy has surged.
But after China blocked some imports of timber, and introduced high tariffs on wine and barley that immediately halted trade, exporters say the risk of political entanglements has simply become too high.
“Obviously China is a big market but no one in their right mind would be selling to them and putting new business into that market because of what is happening with barley and other agricultural commodities,” said Brett Donoghue, export manager for New South Wales-based grain marketer Agracom.
Australia’s ties with top trade partner China soured in 2018 when it became the first country to publicly ban Chinese tech giant Huawei from supplying equipment for its 5G network over data security concerns.
Things have gone sharply downhill since Canberra called for an inquiry into the origins of the novel coronavirus pandemic, first observed in central China late last year.