Despite the decline in forecasts for global barley production, prices remain quite low

Demand prices for barley have recently started to rise amid curbs on sales by producers who initially sell canola to replenish working capital, delaying sales of wheat and barley until the volume of the new crop becomes clear.

We will remind that in the August report USDA experts reduced the forecast of world barley production in 2023/24 MY by 3.2 million tons to 142.6 million tons (152 million tons in 2022/23 MY), in particular for EU countries – by 2 to 48 .4 million tons, the Russian Federation – by 0.5 to 19.1 million tons, Canada – by 0.6 to 9.2 million tons.

The forecast of the world export of barley in 2023/24 was reduced by 0.6 to 26.5 million tons, in particular for the EU – by 0.3 to 6.2 million tons and Canada – by 0.3 to 2.6 million tons. At the same time the import forecast was reduced for Turkey by 0.5 to 2.1 million tons and China – by 0.5 to 7.5 million tons.

According to USDA forecasts, an increase in the consumption of corn and feed wheat will lead to a decrease in the consumption of barley, so the estimate of the final stocks of barley was left at the level of 17.6 million tons.

Analysts of RMI Analytics reduced forecasts of the world barley harvest from 138.7 to 138 million tons due to the reduction of production in Canada, the EU and Argentina. This indicator will be 14 million tons less than the 2022 harvest, so a further decrease in forecasts will increase pressure on prices.

Canadian and French barley prices are also rising. The premium for malt quality in France has already reached $140/t due to possible problems with the availability of quality malt grain.

In Ukraine, feed barley purchase prices remain at a low level of $145/t or UAH 5,500/t for delivery to Danube ports, while prices for malting barley have risen to UAH 6,000-7,000/t (depending on quality) for factory delivery. We will remind you that last year barley prices reached $150-160/ton against the backdrop of blocked Black Sea ports. Asking prices for deliveries to the port of Constanta are $185/t compared to €220-250/t DAP last year.

Malting factories entered into forward agreements for the supply of malting barley, so now they buy it only as needed. This year in Ukraine, the quality of spring barley is quite high, as harvesting is taking place against the background of favorable weather.