In W27 in the barley landscape, the European Commission (EC) adjusted the European Union (EU) barley production in the 2023/24 season downwards to 49.7 million metric tons (mmt), a decrease of 2.4 mmt compared to the June estimate and 1.8 mmt YoY. The EC also expects EU domestic barley consumption to reach 41 mmt, down 1 mmt compared to the June estimate. EU barley exports in 2023/24 are expected to reach 10.2 mmt, up 0.7 mmt YoY, while EU barley ending stocks are projected to reduce by 2 mmt to 6.1 mmt. The Belarusian Ministry of Agriculture and Food reports that winter barley harvesting as of July 7 reached 113 thousand mt, almost three times more than in 2022. The Belarusian winter barley harvested area totalled 27 thousand hectares (ha) out of 162 thousand ha, accounting for 17% of the total winter crop area, up 1% YoY. The harvest reached 54% in the Brest region, Grodno 25%, Gomel 11%, Minsk 11%, Mogilev 6%, and Vitebsk 2%.
Tridge’s analysis indicates that the Australian winter barley crop planting area in MY 2023/24 is expected to reach 4.3 million ha, up 4% YoY. However, the Bureau of Meteorology raised the El Niño event probability to 70%, three times higher than usual, posing a significant risk to Australian barley. As a result, 2023/24 Australian barley production is expected to reach 9.9 mmt, down 30% YoY. Despite these challenges, potential opportunities for Australian barley exports exist in the global market. The disruptions caused by the Russian-Ukraine war and the uncertainty surrounding the Black Sea Grain Initiative may increase the demand for Australian barley, as Ukraine is a significant barley exporter. Additionally, China's barley demand is rising, with 1.28 mmt imports in May-23, a 60% YoY increase. The potential China re-entry as a major barley buyer could further boost export demand if the import tariff on Australian barley is lifted. Despite a projected 27% YoY reduction in Australian barley export volume to 5.5 mmt, 2023/24 export value is expected to show an upward trend, reaching USD 2.42 billion, 7% higher than in 2022/23.
Lastly, in Russia, barley export activity is gaining momentum, confirmed by shipments in early Jul-23 and the line-up for the coming weeks, with more than 180 thousand mt to be loaded. In W27, the limiting factor was dumping from Ukraine, offering the new barley crop for USD 10-15/mt cheaper in order to sell volumes as quickly as possible. Nevertheless, exporters to Russia kept a higher premium in the barley segment. However, in order to meet import demand and attract volumes to ports, it may be necessary to reduce this level of markup, which will stimulate sales by farmers.
