World: USDA increases world barley trade forecast for 2017/18
Chinas resurgent demand and lower global barley production are driving prices to their highest point in nearly 3 years, USDA said in its monthly report published on March 8.
Demand for barley has particularly surged in the Chinese province of Guangdong (the origin for half of Chinas imports) where imported barley is used as a profitable energy component relative to other feedstuffs. Robust malting demand in interior provinces has also contributed to resilient imports, the US Agriculture Ministry reported.
In addition to China, Saudi Arabias relatively inelastic demand and the lowest projected global stocks in more than 30 years are also driving prices upward. Saudi Arabia, typically the worlds largest barley importer, is expected to continue its strong presence by accounting for nearly a third of world imports this year.
Chinas barley imports began to surge at the start of 2017/18 with low global prices, as a record
Australian barley crop drove prices downward. The combination of Australias record 2016/17 crop and a free trade agreement with China (effective December 2015) made the feedstuff a lucrative import. Since that period, however, Western Australias March FOB prices for barley have surged almost $80/tonne (while wheat climbed $50/tonne). Ever so, Chinas imports are raised this month as its demand has shown little signs of waning but are still forecast lower than last year amid tighter global supplies.
As a result of robust global demand and lower world production, ending stocks in all major exporting countries are projected down by years end. Current projections have global stocks down more than a third compared to 2 years ago. Chinas resurging presence has greatly influenced barley prices since last year, even as they fail to deter its robust imports.
For 2017/18, the USDA increased its forecast of barley imports by China by 500 thousand tonnes versus last month, to 7 mln tonnes.
Irans barley import forecast is up 200 thousand tonnes to 2.1 mln, while Saudi Arabias barley import forecast is down 500 thousand tonnes to 8.5 mln.
The export forecast is up for Kazakhstan by 200 thousand tonnes to 1 mln tonnes in total, thanks to larger crop and strong demand from Iran.
Global barley trade 2017/18 is forecast at 27.135 mln tonnes this month vs. 26.935 mln in February and 29.573 mln in 2016/17.
Barley production is seen at 142.365 mln tonnes, up from last months forecast of 142.078 mln tonnes, and compared to 145.961 mln tonnes in 2016/17.
World barley consumption is forecast at 146.575 mln tonnes (146.574 mln in February, 150.338 mln in 2016/17), whereas ending stocks are expected to total 17.866 mln tonnes (17.8 and 22.076 mln, respectively).
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