Supplies from Australia replace Russian barley exports to Saudi Arabia

Sourcing country data for the last two marketing years shows a 41 percent decline in Russian barley imports to Saudi Arabia from 2020/21 to 2021/22. According to USDA analysts, one of the reasons for such a sharp decline was the events in Ukraine, which removed the Black Sea barley from the international market and significantly increased the overall international price.

The summer grain deal between Russia and Ukraine did not lead to the increase in Russian barley exports to Saudi Arabia, as many expected, with the exception of 35,000 tons of Russian barley, which will arrive at the seaport of Dammam in the next few days (as of November 3) .

Tab. 1. Barley exporting countries to Saudi Arabia (according to Trade Monitoring Report)

In the 2021/22 season, Australia supplied 68% of Saudi barley imports, or 2.78 million tonnes, about 7% more than the previous year. Australia is expected to remain the dominant supplier of barley to Saudi Arabia this year with an estimated 8 million tonnes of barley. Australian barley is also competitive in price compared to the European Union.

Barley imports to Saudi Arabia for the first six months of the 2022/23 season (July-December 2022) are estimated at 2.6 million tonnes, up 6% from 2.46 million tonnes in the same period last season. The latest available data from various exporting countries shows that Saudi Arabia imported 1.42 million tonnes of barley in July-August 2022, nearly 29% more than last year. According to local importers, the significant increase in barley imports this marketing year was due to a large amount of barley exported from Australia and low domestic barley stocks. Talk that the government may restore the direct subsidy regime for barley, which was scrapped in April 2021, also prompted importers to buy more barley as many expect subsidy payments could backfire.