Market access challenges of exporting SA grain

Sep 27, 2017

By Tony Russell

Executive Manager, Grains Industry Market Access Forum


Grain producers are faced with many challenges in maintaining the viability and success of their enterprise. Every producer is well aware of the challenges in maintaining productivity in the face of a variable climate and how best to market their grain.

There have, however, been emerging difficulties in the form of weed seeds and pests in the grain that impact on our ability to sell our crop to certain markets that object to their presence on quarantine grounds. While these types of ‘hurdles’ are not necessarily new, there is no doubt that our customers are placing greater scrutiny than ever on our grain. This is a very strong and clear market signal, to which our industry, including producers, must respond in order to maintain access to these important markets.

The most prominent market access issue that we face today is the China market for our barley. In excess of 5 million tonnes has been shipped to China from our record 2016 crop emphasising the size and importance of the market. However, since the protocol outlining the quarantine conditions for Australian wheat and barley exports to China came into effect in 2015, grain handlers and exporters have needed to apply greater effort to meet the specific quarantine requirements. 

The most challenging of all quarantine issues for the China market has been the increased focus on reducing the level of snails allowed in shipments. Two snail species are now on the quarantine list for Australian grain shipments to China: Vineyard snail (Cernuella virgata) and Pointed Snail (Cochlicella acuta). Both species can be found across grain growing regions of southern Australia. Exporters are required to minimise the presence of these pests in grain shipments to China and to source grain from areas of low snail prevalence, or to treat the grain to meet China’s requirements. While only the live snails are of quarantine concern to China, dead snails also cause issues around grain quality and foreign material in consignments.

The Australian grains industry has maintained a longstanding and very successful process for managing both quality and quarantine issues in our export markets. This is facilitated through the grain trading standards which are managed by Grain Trade Australia. Commercial storage operators are responsible for managing the receival of grain including their interpretation of the quality of the grain.   

Grain trading standards enable grain to be marketed and accumulated into the supply chain to meet the various quality and quarantine requirements of a broad range of markets. Exporters need to select stocks that best meet both the quarantine requirements of the importing country government and to meet the consumer demand. Recent market developments have seen a major surge in demand from China which has resulted in more than 60 percent of all barley exports being shipped to this market. This has provided challenges for the supply chain to find adequate stocks to meet the quarantine requirements of China. Nevertheless, the system has served the Australian industry very well for many decades and, with careful and diligent management from the farm all the way to the point of export, it will continue to ensure both market access and strong demand for our grains.

The China market access challenge

Since 2015 there has been significant effort applied across our industry to meet the stricter conditions applying to shipments of grain to China. Evidence confirms that it has been a bigger issue in barley than wheat. This could be partly explained by the substantially large volume of barley exports to China and the relatively lower stocks available to select low pest/pest free grain.  Ultimately if the market demand continues from China (and there is no evidence to suggest that it will decline) the industry will need to consider a review of the Grain Trading Standards applying with respect to snails in our grains and oilseeds. Under the protocol, Australian exporters are required to minimise pests of concern and therefore the opportunity to sell to China will only be maintained if the industry can demonstrate it is effectively minimising these pests, which may include lower tolerances in grain receivals.

Grains Industry Market Access Forum (GIMAF) recently partnered with Department of Agriculture and Water Resources (DAWR) to host China’s quarantine authorities, General Administration of Quality Supervision, Inspect and Quarantine and China Inspection and Quarantine Service, in Australia to see the implementation of the Industry Management Plan to supply wheat and barley to China market across the supply chain, from producers to research providers, industry associations, exporters and governments. Many government and industry participants were involved in the visit to demonstrate the work and commitment of Australia to meet China’s requirements including Murdoch University, CBH Group, Grains Industry WA, Viterra, Cargill, Graincorp, PIRSA, Grain Trade Australia and grower groups. Importantly the visit showcased the significant efforts being made right across the supply chain to manage to snail problem. 

The Chinese delegation was provided with excellent exposure to the research efforts to control snails in the field, management process employed by grain producers by visiting farms in South Australia and Western Australia, viewing control systems in our grain handling system and witnessing the final inspection and recording processes by authorised officers who provide approval for the phytosanitary certificate. 

The delegation acknowledged our capabilities and systems to manage grain exports to China and also provided some recommendations to improve export grain management, to better demonstrate the minimisation of quarantine pests and to quantify the outcomes of Australia’s efforts to reduce pests.

The visit by Chinese officials has strengthened our view that complacency about market quarantine concerns will be to our detriment and ultimately to our downfall. Market access is vital and we need to ensure that we continue our efforts to meet important market quarantine requirements.

All news