In W22 in the barley landscape, drought in the Maghreb region - Morocco, Algeria, Tunisia, and Libya - has significantly worsened the prospects for grain production, which is expected to lead to higher food prices, increased dependence on imports, and heightened risks of political and economic instability. In particular, in Morocco, a severe drought accelerated the maturation of wheat and barley crops, which significantly reduced their yields. Therefore, MARS estimates the Moroccan barley harvest in 2023/24 to reach 1.12MMT, down 60% YoY and 31% compared to the 5-year average, with a yield of 0.99MT/ha, down 18% on average. Meanwhile, Algeria is experiencing the worst drought in 40 years, resulting in significant crop losses. Thus, the Algerian barley harvest in the 2023/24 season is expected to total 1.08MMT, down 26% YoY, with a yield of 1.06MT/ha, a decrease of 14%. In Tunisia, MARS predicts 2023/24 barley production to amount to 225K MT, down 57% YoY and 56% compared to the 5-year average. Due to this situation, experts expect the Maghreb wheat and barley imports in the 2023/24 season to reach a record 25.1MMT, which is expected to entail a significant burden on the budgets of the countries.
According to Rabobank's forecast, in FY 2023/24, Australia is expected to increase the area of winter crops to 23.48M ha, up 0.3% YoY and 5% above the 5-year average. However, the Australian winter crop harvest is expected to be lower than the 2022/23 season due to the drought caused by the El Niño phenomenon. Specifically, the Australian barley sowing area is anticipated to reach 4.27M ha, up 1.3% YoY but down 10.4% compared to the 5-year average. In case of sufficient rainfall in the 2023/24 season, Australian barley production is expected to amount to 10.8MMT, down 24% YoY. For the 2023 barley harvest, the Ukrainian area under winter barley was greatly reduced to 535K ha, as this was the first autumn sowing campaign since the beginning of the Russia-Ukraine war, and the south of Ukraine, where winter barley was usually grown, is still partially occupied. As for Ukrainian spring barley, as of May 25th, only 763K ha were sown. Until 2022, Ukraine occupied the 2-4th place among the main exporters of barley, but after the Russia-Ukraine war that led to the partial occupation of the southern regions, Ukraine fell to 6th place. From July 2022 to May 24, 2023, Ukrainian barley exports amounted to 2.624MMT, down compared to 5.676MMT registered a year ago. In the 2021/23 season, China’s share in Ukrainian barley exports reached 45%, but in MY 2022/23 it has decreased to 12%.
The Russian government raised its base price for calculating barley export taxes to USD 24.58/MT, which will result in a decline in export duty. The decree comes into force on June 1st. Lastly, AHDB predicts UK barley exports for the 2022/23 season at 1.15MMT, up 50% YoY. According to UK Trade data, from July 2022 to March 2023, UK barley exports to the EU reached 871.85K MT, up 60.3% compared to the same period in the 2021/22 season. Similarly, the EU Commission indicates that as of May 29th, the EU had imported 1.05MMT of UK barley in MY 2022/23, 54.9% of total EU barley imports. The rise in barley exports to the EU is due to increased demand from Spain, as a result of the smaller-than-average barley crop in the 2022/23 harvest at 6.63MMT. Also, the EU Commission forecasts the 2023/24 EU barley crop at 5.29MMT, down 38.5% compared to the 5-year average. Experts indicate that, with EU barley demand looking strong, another aspect to be keen on is price competitiveness. UK feed barley off the East Coast (FOB) for August delivery was quoted at USD 209.24/MT on May 29th. This price will need to remain competitive if exports are to remain firm in the 2023/24 season. Price competitiveness could also be pressured by a looming deal between Australia and China.
