Despite the global bullish wheat market, Argentina emerges competitive for malsters

With the 2020/21 barley sowing season just starting and wheat prices at relatively attractive levels, Argentine farmers are expected to lean toward wheat rather than barley, as many bars are closed around the world due to the coronavirus pandemic, and global beer demand is resuming into a decrease as staple foods and wheat by-products are in upward trend. Both cereals are planted in May-June and harvested November-January.

The barley output in the 2020/21 campaign is estimated at 3.75 million tonnes versus 3.5 million tonnes same period last year, according to the Buenos Aires Grains Exchange.

Australian barley exporters were willing to pay a premium to sell Argentine barley to China in order to keep their customers according to the Buenos Aires grains industry. China had imposed an 80% tariff on barley originated from Australia after dumping allegations emerged earlier this year.

The South American country exported 1.3 million tonnes of malting barley in 2019, of which around 45% went to its top buyer Brazil, according to official trade data.

At the North Hemisphere, United States, Canada and Europe will be processing harvest by August. For now Argentina barley stock balance is averaging around 900,000 tonnes, 70% of which is feed barley and 30% malt, according to estimates.