THE Grain Industry Association of Western Australia (GIWA) is hoping a proposal to increase the upper protein limit for the State’s top grade malting barley varieties will help combat Australia’s reputation for low protein in barley exported to its key Chinese markets.
The proposal was discussed at GIWA’s Barley Spring Forum at Dalwallinu earlier this month, and if passed through the 2018 GIWA Standards Review, will see the current upper protein limit of 12.5 per cent lifted to 12.8pc for Malt 1 barley grades.
The lower protein limit will remain at 9.5pc.
GIWA barley council chairman Lyndon Mickel said the suggestion was put forward after feedback from Chinese customers signalled significant demand for higher protein malt barley.
“There have been concerns about low protein in Australian barley and we believe this is one way that we can try and capture more of that top-end level,” Mr Mickel said.
“By going up to 12.8pc we’re still under a fairly good regime and we’re not touching the bottom level – we still need to capture the malt.”
Chinese customers have raised concerns about low protein levels in Australian malting barley for several years and after a recent Australian Barley Technical Workshop in China, Australian Export Grains Innovation Centre’s barley technical markets manager Mary Reynes said the issue remained.
More than 150 Chinese representatives attended the two-day workshop in May where Ms Reynes said the understanding was that Australia was only country capable of producing a low protein product.
“Some of the key findings were that China still believe that Australia change out their varieties far too quickly for the industry to keep up with, and the delegation felt that China’s perception was that Australia only produces low protein barley,” Ms Reynes said.
According to CBH Group senior barley trader Drew Robertson, who also presented at the Barley Spring Forum, Australia was tipped to export about 6 million tonnes of barley in the year to September, of which about 75pc was expected to be shipped to China.
Mr Robertson said the Chinese market was becoming increasingly important for Australian grain growers, particularly in WA where about 56pc of the country’s barley was exported from.
“It’s by far and away the most critical market for us and it’s critical that we maintain access into that market,” Mr Robertson said.
“Without that market or that outlet for barley, I think it would be very difficult to maintain the demand that we’re seeing for barley in Australia over the past five years.
“Canada is probably our biggest competitor, especially into the malt barley market in China and their supply into that market has increased quite significantly over the past few years.”
Mr Robertson said over the 2017 calendar year Australia accounted for about 73pc of China’s barley imports, with Canada the next largest importer with about 15pc of market share.
Carlton and United Breweries (CUB) brewing materials manager Mark Goldsmith said if Australia could meet higher protein specifications, there was potential for a greater increase in Chinese market share.
Mr Goldsmith was the keynote speaker at the GIWA Spring Forum, representing the largest brewer in the world – Anheuser-Busch InBev (AB InBev) – which acquired CUB in 2016.
AB InBev produces about 500 brands of beer around the world, including Budweiser.
Mr Goldsmith said there was an opportunity for Australian growers to produce 280,000t of malt barley for its Budweiser brewery in China if it could increase protein levels in exported barley.
“What currently isn’t going into China from Australia is the barley that’s required for Budweiser production,” Mr Goldsmith said.
“Budweiser is the biggest brand in the world, it also has its biggest volume produced in China.
“To support that 280,000 tonnes of barley is coming out of Canada at the moment, so there’s an opportunity for Australia to produce that barley that’s going to meet this need.”
Mr Goldsmith said the protein content of Australian barley had deterred AB InBev from using Australian grain to produce its beer product, with protein requirements in the barley used to produce Budweiser at higher levels than the Australian standard at 11.5pc to 13.5pc.
“It’s a step removed from where the current standards are,” Mr Goldsmith said.
“You lose a bit of protein through malting so your barley specs have got to be a bit higher than you want in the malt.
“There’s the challenge to supply 280,000 tonnes of barley out of Australia – and of course WA would be a potential sourcing region for that – that’s going to meet the high protein.”
Public submissions can now be made on GIWA’s proposed increase to the maximum protein requirement for Malt 1 barley and all other recommendations being put forward for the 2018 GIWA Standards Review.
Mr Mickel said there would be 12 months’ notice to growers if any changes were made to the standards.