In W37 in the barley landscape, in its Sep-23 report, the United States Department of Agriculture (USDA) expects global barley production to reach 141.9 million metric tons (mmt) in the 2023/24 season. This is a downward adjustment of 0.75 mmt compared to the Aug-23 estimate and below 151.7 mmt in 2022/23. This negative projection can be mainly attributed to a significant decrease in Canada's barley output, expected to fall by 1.2 mmt to 8 mmt in the 2023/24 season. However, this decline was partially offset by a 0.4 mmt increase in the production forecast for Russia to 19.5 mmt in 2023/24.
The USDA estimates 2023/24 global barley exports at 26.4 mmt, a slight decrease of 0.1 mmt compared to the Aug-23 estimate. Notably, Canada's barley exports are expected to decline by 0.3 mmt to 2.3 mmt in 2023/24. In contrast, Russia is anticipated to increase its barley exports by 0.2 mmt to 4.7 mmt, up from the Aug-23 forecast of 4.5 mmt. The USDA also adjusted the global barley closing stock prediction downwards by 0.2 mmt to 17.4 mmt in the 2023/24 season, a significant reduction compared to the five-year average.
The USDA indicates that Ukraine’s barley harvest reached 5.8 mmt in 2023, an increase of 5.45% year-on-year (YoY), with 2.5 mmt slated for exports, unchanged from the 2023/24 season. Ukraine’s barley shipments amounted to 528 thousand metric tons (mt) as of September 8, a growth of 18.1% compared to the same period in 2022. However, the blockage of Black Sea ports and supply disruptions to neighboring European Union (EU) countries are expected to limit export growth in the near term. Ukraine’s fodder barley purchase price remained low in W37, ranging from USD 135/mt to USD 140/mt for deliveries to Danube ports. Malting barley prices also declined due to minimal export demand and reduced purchases by processors who have built up sufficient raw material stocks.
Lastly, barley prices declined in both deep-water and low-water ports in Russia in W37. This price drop signifies a potential barley oversupply compared to the shipping capabilities and demand. Russian barley export volumes in Sep-23 are notably slower than in the initial two months of the 2023/24 season. Market experts anticipate only 200 thousand mt in the shipment lineup by the end of Sep-23, a significant reduction from Jul-23 and Aug-23 export volumes. Libya, one of the primary barley buyers for the 2023/24 season, may curtail its barley purchases from Russia in the short term amid the catastrophic flood consequences, which affected the country’s major ports. The only limited support for barley prices could potentially come from the strengthened United States (US) dollar exchange rate observed over the past two to three days.