W25: Barley Update

In W25 in the barley landscape, experts indicate that the current season on the EU barley market is expected to be heavily influenced by weather conditions and the behavior of key importers such as Spain in Europe and China in the Asian market. Analysts predict that EU barley, particularly spring varieties, may be significantly affected by drought in many parts of Europe. Forecasts from JRC MARS indicate a 4% decrease in the EU barley harvest due to the ongoing weather conditions. Coceral also revised downwards EU barley production forecast for 2023, lowering it by 3 million mt to 56.6 million mt, attributing the drop to reduced harvest expectations in Sweden, Denmark, and the Baltic countries caused by the prevailing drought. Spain, a major barley importer, is expected to face reduced harvests in 2023 compared to previous years, leading to a need for significant barley imports. However, the source of these imports remains uncertain, as lower prices have led to imports from the Black Sea region rather than countries like Germany or France. Meanwhile, the demand for barley from China is also uncertain, with the USDA estimating 7 million mt of barley imports for the 2023/24 season, slightly lower than the 7.7 million mt in 2022/23. If China continues to favor other feed grains like corn from Brazil, it may not exert upward pressure on the barley market, potentially negatively impacting prices.

The arrival of a shipment of Western Australian (WA) barley in Brisbane, Australia, led to an increase in the premium of SFW wheat trade in the northern market, surpassing barley for the first time since Jan-2023. The northern barley market experienced a slight decline due to ongoing dry conditions in northern New South Wales (NSW), while bullish factors overseas have boosted values. As the 2022/23 season draws to a close, Australian barley growers are hesitant to sell their stored grain, and if the dry conditions persist in northern NSW, those located far from ports are expected to hold onto their stocks until just before the arrival of the new barley crop, when prices are at their peak. A cargo of WA feed barley offered in Brisbane has already been sold out, with buyers primarily coming from south-east Queensland feedlots and poultry operations in greater Brisbane. The price at port for June's boat was USD 410/mt, but it is expected to decrease slightly for the July shipment, as barley from West Wyalong in NSW and southern regions remains a more cost-effective option for Western Downs feedlots. Traders indicate that one cargo is scheduled to arrive in Brisbane in both July and August, with monthly shipments likely to continue if dry conditions expand beyond the Queensland-New South Wales border. The quality of barley from WA and South Australia is anticipated to be high, in contrast to some parcels from central and southern NSW, where the wet growing season has resulted in mixed quality. The Australian barley market is impacted by dry conditions in northern regions and the possibility of improved winter-crop conditions influencing sales.

According to APK-Inform, the fodder barley sector in most regions of Ukraine experienced a downward price trend in W25. The Ukrainian barley prices were influenced by the approaching harvesting campaign and a decrease in demand from key consumers. The Ukrainian barley export market also contributed to the gradual decline in prices. As of June 16th, demand prices for fodder barley were typically in the range of USD 130-154.38/mt CPT, which are USD 2.71-5.42/mt lower than the prices in W24. It is worth noting that the highest demand prices were still offered by individual buyers who were seeking additional volumes of raw materials.

In the Zhambyl region in Kazakhstan, farmers allocated 216.3 thousand ha for barley cultivation as part of the winter crops harvesting campaign. Harvesting has begun, with farmers in Zhambyl and T. Ryskulov districts aiming to harvest 13.3 thousand ha and 53.2 thousand ha of barley, respectively. The current progress in the region shows that 305mt of grain has been harvested from 235 ha. Also, the harvesting operations are expected to involve more than 800 units of agricultural machinery. Lastly, according to the Federal Customs Service of Kazakhstan, the export of barley (TN VED 1003) in Apr-2023 amounted to 101.31 thousand mt, valued at USD 23.74 million. In the Jan-Apr period, 350.67 thousand mt of barley were exported, amounting to USD 83.80 million, a significant increase of 184% compared to the same period in 2022 when barley shipment reached 190.96 thousand mt.