Australia: Strong prices offered for feed barley

The price rise for feed barley, by more than AU$40/tonne in the past month, is attributed to world demand and the deregulation of South Australia's export marketing arrangements, Stock Journal published June 13.

The price being paid for F1 barley at Port Adelaide has risen to AU $219.50 in the past week. On May 10, the equivalent price was AU $180/tonne. Wallaroo and Port Lincoln were paying AU $173 on May 10. This week, they're paying AU$214/tonne.

Callum Downs analyst Malcolm Bartholomaeus says there are a number of reasons for the strong prices being offered. "It is being driven by the world market and, for the first time, because of deregulation of the market, we're seeing what's happening in the world market reflected more fully in the cash prices," he said.

"One of the factors pushing up the price is a quite severe drought in Russia and the Ukraine - they usually supply discounted barley into the Middle Eastern markets. "Another reason is that the United States and European grain futures markets are all heading up because of falling crop prospects and in the US there's been a wet start to their harvest.

Mr Bartholomaeus said deregulation was having a balancing effect on prices in SA. "Because of deregulation, we are seeing higher prices in SA than there would be without deregulation," he said. "For example, on Tuesday this week feed barley was exactly the same price at Port Lincoln, Port Adelaide and Geelong.

"There would normally be a $20 a tonne discount in SA at this time of year. "While there are things working against us, such as the high Australian dollar and high shipping rates, at the end of the day, global supplies are becoming really tight and prices have to go higher to encourage more grain production."

Mr Bartholomaeus does not expect the prices to remain at the present high.

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