Australia: Barley exports forecast to surge thanks to stronger malting barley demand

Australian barley exports will surge to their highest level on record this season, thanks to a bumper harvest and good quality, US officials said.

The US Department of Agriculture's Canberra bureau forecast barley exports at 7.4 mln tonnes in 2016-17, compared to official USDA forecasts of 7.0 mln tonnes.

This is up 37% year-on-year, and the largest export number on records going back to 1960.

The bureau forecast the rise in exports to "higher local production and high grain quality".

"Exports of malting barley could rise by one third to 2.0 mln tonnes," the bureau said.

"Demand for malting grade barley is expected to be stronger over the year because of lower supplies from some other countries," the bureau said.

And Australian feed barley exports into China are becoming more competitive, thanks to the weaker Australian dollar.

But the bureau warned that demand for feed barley in China is "difficult to predict," as livestock producers switch to increasingly affordable corn for feed use.

"Chinese demand for malting grade barley is expected to be stable."

The bureau estimated the Australian 2016-17 barley crop at a record 11.0 mln tonnes, up 400,000 tonnes from the official USDA estimate, citing "increased yields in most regions following favorable rainfall and seasonal conditions".

And the share of malting barley in harvest will increase, the bureau said, despite some frosts in parts of Western Australia.

"Better seasonal conditions have contributed to higher grain quality, with an increased share of the harvest likely to be classified as malt grade barley."

Domestic demand for malting barley is rising, while feed barley prices are falling, thanks to greater availability of pasture and competing feedstuff.

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