Australia: ABB Grain Ltd (ABB) announced on October 13 it has revised its South Australian gross barley pool estimates for South Australia, with the malting barley pool lifting $5/t to $175-185/t and the feed barley pool easing off $5/t to $130-140/t. ABB managing director Michael Iwaniw said that a key concern at the moment was the million tonne restitution tender by Europe for feed barley.

International feed barley prices had rebounded since their collapse in July and any aggressive action by the Europeans to ensure their barley was sold would result in a drop in world barley prices.

Mr Iwaniw said he hoped the Europeans would act responsibly and price their barley so that it simply achieved current export parity without putting significant downward pressure on world prices. This issue is likely to come to a head with a major tender due to close on Thursday, October 14.

Meanwhile large world feed grain stocks continue to pressure feed barley prices. This pressure increased in recent weeks due to crop damage in Canada and more recently in the western and eastern areas of Australia due to inclement weather which could result in the downgrading of malt barley to feed quality as it did in Canada. As a result estimates of malt barley supplies from both Canada and Australia were being revised downwards. This increase in supplies of weather affected wheat and barley had pushed feed grain prices down and increased malt barley prices simultaneously.

Beer consumption in China continues to increase and in theory if this consumption level continues it will contribute to a significant increase in barley imports but this remains to be seen as the Chinese domestic barley production level and the use of substitutes will influence import volumes.

Mr Iwaniw warned that with the significant difference between world feed and malting prices at the moment there was a risk of second grade malting barley entering the market and depressing the price.

The increase in the exchange rate is another influence affecting barley prices at the moment. While other factors have off-set this for malting barley, the increase has played a part in bringing the feed pool indicator down.

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