Ukrainian barley is rapidly rising in price amid active shipments to China

As of August 11, Ukraine exported 113 thousand tons of barley, and the pace of shipments has accelerated. The main direction remains China, which forms up to 95% of the supply structure, which determines the price dynamics and behavior of market participants. This is reported by analysts of the PUSK agricultural cooperative, founded within the VAR.

“Barley has begun to be purchased more actively, and we see an increase in prices. Chinese quality is already traded within $216–218 per ton. Regular barley is purchased for $210–212, but these are mostly small lots — 300–500 tons. For lots of a thousand tons or more, you can get an additional premium. By August 15–20, deliveries to China must be made, and so far the supply is not enough, so the market has the potential to reach the mark of $220 per ton with the appropriate quality,” PUSK reports.

At the same time, there may be a decrease in activity on the barley market after the fulfillment of contracts with China. “After the completed shipments to China, a vacuum may appear on the market, as there are almost no new contracts. The premium for Chinese quality will disappear, and at current prices, barley is uncompetitive for other destinations — Israel, Cyprus or the EU. The second half of August and part of September may pass under the sign of correction: the seasonal model shows a possible decrease to $205–209 per ton,” analysts believe.

Another factor influencing the market is the low level of barley stocks in Ukraine at the beginning of the season. This may cause an early exhaustion of supply and also affect prices. “This year, stocks are smaller than last year — by 2 million tons, so barley will run out faster. Accordingly, competition between exporters and processors may keep prices at a high level. “Those who don’t have time to sell now may consider selling in January-February, when demand will increase again,” experts add.

Tags: export, barley, prices, Ukraine, China