FILE PHOTO: Silos are loaded with barley in a farm near Gunnedah

SYDNEY (Reuters) – Australia said it will consider challenging China’s imposition of hefty anti-dumping duties on Australian barley imports at the World Trade Organization (WTO), saying fears of a looming trade war with its largest trading partner were misplaced.

China announced anti-dumping and anti-subsidy duties totalling 80.5% on Australian barley imports from May 19, which is expected to all but halt a billion-dollar trade between them.

“There’s no trade war,” Agriculture Minister David Littleproud told a media briefing, adding that demand for Australian iron ore to China had increased recently.

“This is a disagreement on one commodity out of hundreds that go over there.”

Australia reserved the right to go to the WTO for a ruling as it did not subsidise barley farmers, the minister said.

Australia’s agriculture sector has urged the government to take the case to the WTO.

National Farmers Federation Chief Executive Tony Mahar said China’s decision was a massive blow to grain growers because China was Australia’s largest barley market, buying half the country’s barley exports in a trade worth about A$917 million ($600 million) a year.

Australia’s total exports to China are worth A$135 billion, with iron ore exports worth A$63 billion.

Both China and Australia have said the barley decision is not a form of retaliation by Beijing against Canberra for Australia’s push for a global inquiry into the origins of the novel coronavirus outbreak.

However, a state government minister in Western Australia, home to much of Australia’s barley crop, thought otherwise.

“It would appear Western Australian barley growers have been caught up in a much larger issue,” WA Agriculture Minister Alannah MacTiernan said in a statement.

Australian Trade Minister Simon Birmingham said the government would examine the reasons behind China’s decision, but rejected the suggestion farmers were dumping produce on global markets.

“This barley decision is bad for Australian farmers, but it’s also bad for Chinese breweries and other customers of Australian barley in China who will end up paying more for product or getting substandard product from around the world,” Birmingham said in an interview with Channel 7.

($1 = 1.5302 Australian dollars)

(Reporting by Kirsty Needham and Renju Jose; Editing by Sandra Maler and Stephen Coates)