As we’ve said since the Chinese trade war on itself began, commodities are fungible and will always find a home. Aussie barley, one the most prominent exports hit by Chinese tariffs on itself, has boomed worldwide, especially in the Middle East. Via Bloomie:
- Australian farmers have taken a dominant market share in Saudi Arabia for the first time.
- The Saudi are second only to China in import volumes.
- Surging barley prices have offset any discounting as well.
- China pivoted to soy and other grains as it lost barley which opened up other holes in markets.
- Thailand, Vietnam and Mexico have all lifted Aussie volumes as well.
See ya, don’t wanna be ya, China.
Barely is, in fact, entering a rude boom, as previously reported via WSJ:
- Exports are forecast to be up 64% in 2021.
- Other trade war sectors are moving to copy the success.
China stoopid
This is exactly as expected except even better thanks to the bull phase of the commodity cycle. The CCP can tariff us all its wants but its demand is not leaving the global economy so all it achieves by doing so is opening holes elsewhere that we can fill.
The same is happening in coal where South Africa has substituted former Australian shipments to China and we have filled the gap left by it in India.
In short, China has NO power over our commodity exports and its coercive behaviour should be greeted with a pat on the head and fond farewell.
