A tariff-free trade deal and cheaper freight built Australia's lead in China, but new premium barley varieties, not price, will decide whether it holds.
Australia supplied 67% of China's imported malting barley in the 2025-26 financial year, according to Farm Weekly's report on remarks by Dalian Xingze Malt deputy general manager Zuojun (Jack) Wang at the Grains Industry Association of Western Australia's Barley Forum in Perth this week.
Tariff-free access under the two countries' trade deal underpinned that lead, he said.
Australia's 67% share dwarfs Canada's 33% for the 2025-26 financial year, a gap that widens further within Australia's own supply. Nine in ten of those tonnes trace back to Western Australia alone.
Key Facts
- Duty-free access and lower moisture make Australian barley about $10 a tonne cheaper than Canada's.
- Australia supplied 67% of China's malting barley imports in the 2025-26 financial year.
- Within that total, Western Australia accounted for 90% of the country's China-bound barley.
China's malting barley imports have held between 4.5 million and 4.7 million tonnes a year. Wang expects that to climb to 5 million to 5.5 million tonnes as demand grows.
All the malting barley Dalian Xingze Malt bought this financial year came from Western Australia, he added.
Why Australian Barley Costs Less Than Canadian Barley
Barley shipped from Australia to China enters tariff-free under the China-Australia Free Trade Agreement. Canadian barley carries a 3% import duty. Moisture adds a second gap.
Australian barley typically runs 10% to 10.5%, against 12% to 13.5% for Canadian grain. Combined, Wang put the total cost advantage at roughly $10 a tonne. Canadian barley still carries higher protein, generally above 12% compared with Australia's 10% to 10.5%.
It also has higher enzyme levels, which support fermentation and aroma. Chinese breweries require a minimum malt protein of 9.8%, meaning the raw barley needs to test above 10.3% once processing losses are factored in.
China's Premium Beer Market Is Driving Barley Demand
China's beer output has averaged 35 million to 36 million kilolitres a year over the past five years, even as the mix inside that volume has shifted. Mid-to-high-end beer makes up just 38.7% of China's total beer volume this year, per Wang's presentation. It alone generates about 68% of revenue and 74% of gross profit.
Less than two-fifths of China's total beer volume falls into that mid-to-high-end tier, yet it produces most of the industry's revenue and gross profit. The gap between volume and value is what's steering maltsters toward specialty barley.
High-end beer makes up another 11% to 13% of volume, and ultra-high-end beer adds 2% to 3%. This premium squeeze is pulling brewers toward barley suited for distinct flavour rather than bulk output.
Per Wang, Australia's Maximus variety has become the default choice. As Wang put it: "Maximus variety is widely, even exclusively, adopted in China to produce premium beer."
Australia Needs New Malting Barley Varieties for China
Spartacus and Planet also produce high-end malt, but current output does not meet Chinese demand, per Wang. He wants two or three additional high-quality malting varieties, and he wants breeders to lift protein content on new varieties to 10.5% to 11%. Feed-grade FAQ barley has its own problem.
Specifications for FAQ barley have worsened over the past two years, per Wang's remarks. Demand holds only if contracts still meet those standard terms, he added.
Neo variety trials are also underway. Wang signed testing contracts for Neo, but undersized kernels from Western Australian-grown Neo this year forced the company to source the variety from the east coast instead.
The cargo arrives early next month, and Dalian Xingze plans to malt it in September. If the results meet specification, Neo could reach beer producers' procurement lists next year.
