China has bought around 600,000 metric tons of Australian barley since Beijing lifted punishing duties on the grain earlier this month, traders said, underlining strong pent-up demand for the grain from its former top supplier.

China ended anti-dumping tariffs on Australian barley on Aug. 5, roughly three years after the 80.5% duties first hit exports once worth up to A$1.5 billion ($967 million) annually.

Importers have already snapped up 10 cargoes of old crop Australian barley for both malting and animal feed since the tariffs were lifted, said three European traders, and more deals are likely.

“These are big volumes and I expect more in coming months as the new crop in Australia approaches,” said a European trader with direct knowledge of the deals.

“There is not all that much available in Australia at this time of the season but China has been buying all it can.”

Of the recent purchases, about two or three of the consignments are high-grade barley usually for malt and beer production, sold at around $325 per ton on a cost and freight basis (C&F), and seven to eight are animal feed barley bought at around $277-$280 per ton C&F, said two of the traders.

One cargo of malting barley is already on its way, Australia’s agriculture minister said on Tuesday.

“China likes Australian barley and Chinese importers have been forced to pay over Australian prices for supplies from other origins,” one of the traders added, referring to Australia’s status as China’s longterm supplier of consistently good quality grain.

Barley is expected to be a much sought after substitute to corn in animal feed, with heavy rain in China recently damaging some of the local crop and pushing up prices, while war in top supplier Ukraine has also disrupted supplies, say traders, analysts and feedmakers in China.

Another eight to 10 shipments of feed barley, which were bought from optional origins, have also been switched to Australia, the traders said.

Under optional origin terms the seller usually has the freedom to select the country of origin.

One Singapore-based trader said Chinese importers had booked seven cargoes of 60,000 tons each in just the last six to 10 days.

The European three traders said that in the next two to three months there should be around 20 shipments of Australian barley arriving in China.

“It’s a quick return to old times in my view and Chinese demand is continuing,” said the first trader.

“We expect to see China buying Australian barley all the way through 2024, they have a preference for Australian quality,” the second trader added.

Slow Australian feed wheat exports because of cheap South American corn means that scarce port loading slots are available in Australian ports, traders said.

Traders said the next stage would be Chinese purchases of new crop Australian barley, with Australian farmers currently unwilling sellers partly because of the uncertain Australian harvest outlook.

Source: Reuters (Reporting by Michael Hogan in Hamburg and Naveen Thukral in Singapore. Additional reporting by Dominique Patton in Beijing, Editing by Louise Heavens)