China may ban imports of Australian wheat as trade tensions escalate – sources

Beijing is expected to bar Australian wheat imports, putting a AU$560 million (US$394 million) trade at risk, industry sources told the South China Morning Post. The grain could be the latest Australian product banned in China.

From Friday, Australian barley, sugar, red wine, timber, coal, lobster, copper ore and copper concentrates 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.

“Chinese importers have been told to obey these rules strictly and suspend all orders for commercial reasons. Shipments arriving at the port before Friday will be released – but those arriving after will be impounded. It won't matter if they have already been sent to bonded areas,” a trader, who declined to be named, was quoted as saying by the Business Times.

The ban will undermine Australian exports to China that are worth more than $843 million annually. Wheat accounts for nearly half of the country's total grain exports to China.

Tensions between Australia and its largest trading partner have been flaring for around three years, after Canberra alleged that there was a growing Chinese influence on its domestic affairs – a claim repeatedly denied by Beijing.

In 2018, the Australian government added fuel to the fire as it banned China’s Huawei and ZTE from the country’s 5G rollout. The most recent escalation happened when Australia pushed for an international inquiry into the origins of the coronavirus outbreak in April.

Chinese authorities announced last week that they would suspend further imports of products from Emerald Grain and timber from Queensland. They said the decision was made after inspectors found unacceptable levels of contaminants and discovered pests in some cargoes. The decision was preceded by similar trade restrictions on beef, and anti-dumping duties on Australian barley and cheap Australian wine.

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