AUSTRALIA sells China a lot of barley.
And it is easy to see why: Chinese production of beer is going through the roof.
From relatively low production levels up to the 1980s, China has exploded into beer brewing at a rate never experienced anywhere in the world in the past.
Exponential growth during the past 30 years has seen China overtake the US as the biggest brewing nation in 2002, then double its production in the following 10 years.
It now accounts for about one quarter of the world’s brewing of beer.
According to figures from German hop supplier, the Barth-Haas Group, Chinese interest in beer had virtually been non-existent up to the 1970s. Production in 1970 was estimated at a meagre 120 million litres.
In the early 1980s, China overtook Australia in beer production and later in the decade it surpassed British brewing levels.
As the Chinese population became more affluent from the 1990s, beer production and consumption skyrocketed.
Nearly all the beer brewed in China is consumed domestically.
Only in the past year has beer production tapered off to 49 billion litres – virtually the same level as 2011.
That may indicate the Chinese beer market is beginning to plateau.
The Barth-Haas 2012 Market Leaders report recorded China’s per capita beer consumption at 36 litres.
While this was less than half the consumption of Australia or even the US, it is at a level similar to other Asian nations, such as Vietnam, Thailand and South Korea.
CBH Group barley trading manager Trevor Lucas said Australian traders had also noticed the slowing down in malt production during the past few years.
“The malting industry, in the past five years, is nowhere near capacity,” Mr Lucas said.
That was another indication Chinese beer production might be slowing.
But traders are expecting Australia to have its biggest year of barley sales to China.
Mr Lucas said China imported 2.2 million tonnes of barley last year for malting, of which Australia provided 1.5 million tonnes.
Total imports were expected to rise to three million tonnes this year, of which Australia was likely to supply about 2.5 million tonnes.
He said that was partly due to China running down its stocks during the past year when barley prices were relatively high, but also as a result of decreasing domestic barley production.
“Barley is the only crop in China not subsidised by the government,” Mr Lucas said.
“It doesn’t have a guaranteed minimum price, not like other grains.
“Chinese barley growers will look to other crops, so China will be looking to Australia for barley.”