World: World barley trade forecast lowered on smaller than expected export from the EU and Russia

World barley trade is forecast to total 27.205 mln tonnes in 2016/17 versus 27.475 mln in 2015/16, the USDA said in its April report. Last month, the forecast for the current marketing year was 27.705 mln tonnes.

EU barley export forecast is cut 500,000 tonnes to 5.4 million on a tepid pace as indicated by customs data and waning demand from North African countries, the USDA said.

Russian barley export forecast is down by 200,000 tons this month to 3.4 million on the lacklustre speed of recent shipments.

Ukrainian barley export forecast is up 200,000 tonnes to 5.2 million on data reflecting stronger-than-expected shipments and relatively competitive prices.

Moroccan barley import forecast is lowered 300,000 tonnes to 600,000 reflecting a slow pace of shipments from the EU and an improvement in early-spring pasture conditions relative to a year ago.

Tunisian barley import forecast is down 200,000 tonnes to 400,000 on slow shipments from the EU.

Barley prices for major exporting countries have witnessed significant declines since the beginning of 2016. Even though world barley production is projected down from the previous year, prices have not responded amidst pressure from a 2016/17 record global corn crop. Prospects for corn have affected barley demand as both are utilized as energy components for animal feed, the USDA said.

Barley prices have also been depressed by a record crop in Australia. The country is projected to be the largest exporter in 2016/17, supplanting the EU and supplying a quarter of the world’s demand. Compared with January 2016, Australian prices were nearly US$30/tonne lower year-over-year. Lower prices are expected to boost exports to key markets such as China. The implementation of the China-Australia Free Trade Agreement (January 2016) has provided Australia a competitive advantage with the removal of the import duty for barley. For the first two months of 2017, China’s imports of Australian barley more than tripled compared to the same period the previous year, according to Chinese customs data.

As a result of Australia’s competitive prices, other major exporters (i.e., EU and Ukraine) have felt
downward price pressure since the beginning of 2016. Despite slightly lower production, EU prices are lower, and 2016/17 exports are forecast to be the second-largest behind Australia. For Ukraine, prices averaged US$137/tonne in January, decreasing over $20/tonne year-over-year as a larger domestic crop has also pressured prices. Weak barley prices imply that growth in supplies of feed grains are outpacing global demand.

World barley production forecast is up to 147.012 mln tonnes this month (146.966 mln last month, 148.112 mln in 2015/16), total consumption is expected at 147.142 mln tonnes (147.363 and 147.836 mln tonnes, respectively) and ending stocks are seen at 24.222 mln tonnes (23.704 and 24.352 mln, respectively).

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