Barley prices in Ukraine are higher than last year’s at the start of the season, but may decline

Lowered barley production forecasts in major exporting countries slightly increase the demand for barley in Ukraine, but there is no hope for a pickup in barley exports in the new season.

The purchase prices for feed barley in Ukraine for delivery to the Black Sea ports did not receive significant support from the speculative growth of feed wheat and corn prices, which rose in May to 200 and 185 USD/t, respectively. However, barley prices rose from 150-155 USD/t to 160-165 USD/t or 7400-7500 UAH/t and are currently at this level at the beginning of the season. It is worth noting that last year, barley prices at the beginning of the season decreased to the level of 130-140 USD/t or 5200-5500 UAH/t with delivery to the Black Sea ports.

The demand for malting barley in Ukraine this season will remain low, as maltsters have sufficient stocks of old crop and currently offer forward prices at 6500-7000 UAH/t with delivery to the plant, compared to 8000-8500 UAH/t a year ago.

Since the beginning of 2023/24 MY, as of June 17, Ukraine has exported 2.457 mln tonnes of barley, down slightly from 2.67 mln tonnes in the same period last year, and the exports slowed down significantly in May-June.

According to AGRIColumn, the barley harvesting in Romania has already started, about 10% of the area was harvested with the yield of 6-8 t/ha with good quality (weight 640-670 g/l), which caused the price decrease, although the full harvesting campaign will start in 10-14 days. According to Atria Brokers, prices for Romanian barley fell to about 188 USD/t FOB Constanta, which corresponds to the level of Ukrainian barley offers of 185-190 USD/t FOB Black Sea ports and makes Ukrainian origin uncompetitive.

According to the EU Commission, the barley production in Romania in 2024 may reach 2.2 mln tonnes, which is slightly lower than last year’s figure (2.3 mln tonnes).

In the June supply and demand report, USDA experts lowered the forecast of global barley production in 2024/25 MY by 1.95 mln tonnes to 147.96 mln tonnes, which will still be 5.75 mln tonnes more than in 2023/24 MY. The forecast of barley harvest for the EU was lowered by 0.7 mln tonnes to 53.8 mln tonnes, Russia by 0.5 mln tonnes to 19 mln tonnes, Argentina by 0.5 mln tonnes to 4.7 mln tonnes and Ukraine by 0.2 mln tonnes to 5 mln tonnes. At the same time, the forecast for Australia was increased by 0.6 million tons to 11.5 million tons.

The forecast of global barley consumption in 2024/25 MY is also lowered by 0.83 mln tonnes to 149.44 mln tonnes, which is more than last season (143.79 mln tonnes).

The decline in the harvest will lead to the reduction of barley exports in 2024/25 from the EU by 0.2 mln tonnes to 7.3 mln tonnes, Russia by 0.3 mln tonnes to 4.8 mln tonnes, Argentina by 0.3 mln tonnes to 3.2 mln tonnes and Ukraine by 0.1 mln tonnes to 2.2 mln tonnes. For Australia, the export forecast was raised by 0.6 million tons to 5.6 million tons.

The estimate of global barley ending stocks was lowered by 0.27 million tons to 18.27 million tons, which is 0.6 million tons less than last season and significantly below the 5-year average.

Tags: Ukraine, Russia, barley, Romania, EU, prices, Argentina, Australia