Russia will face troubles this year with sales of barley both in the local and export markets, Agrimarket.Info posted on July 1. "The main difficulties will be connected with the situation on the world market, as barley is one of the basic export crops", Director of Marketing Department of the International Grain Company Ltd Nikolay Demyanov has told Interfax news agency.

He said the possibilities of Russian barley exports were limited by about 3 million tonnes per year. The main consumers of barley are the Middle East countries, in particular - Saudi Arabia. "But the sales there are to be made in conditions of tough competition on the world market", Demyanov said.

"In this year the situation is aggravated by good barley crop forecasts in the main competitors of Russia - Ukraine, EU and Australia", he said, adding that Ukraine will have a crop 25 to 30 percent higher than last year, and the European Union - no less than 10 percent higher. Australia has not sold its record barley crop of the 2003/04 MY yet. In the 2004/05 the crop is also forecast high.

"It is not a simple coincidence that Saudi Arabia - the world's largest importer of barley, has suspended its purchases in expectation of the price crop. And the prices are really dropping", Demyanov said. "The situation, which is now developing in domestic market, resembles the year 2002, when the prices in domestic market dropped down to 1,200 roubles per tonne [29 roubles = $1], mainly due to the fact that the exporters had proved unable to sell the necessary amounts of grain on the world market", he said.

According to his estimate, this year the total barley crop in Russia will remain on the last year's level - about 18 million tonnes. However, the structure of the crop will change - the share of winter barley, which is already being harvested in the south of the country, will be 2.5 times higher than last year. The collection of winter barley is expected within the range of 2.2 to 2.5 million tonnes against 900,000 tonnes last year.