Australia: ABB Grain Ltd said on December 8 it has lifted its Victorian malting barley pool gross indicators by A$8/t to A$190-200/t for malting 1 barley in the No.1 pool and $188-198/t for malting 1 barley in the No.2 pool (A$5/t premium for Sloop and Baudin). These indicators equate to an estimated delivered Geelong price of A$162-172/t for the No.1 pool and A$160-170/t for the No.2 pool. The increase was a reflection of the increasing demand for good quality barley in what has been poor quality season, ABB managing director Michael Iwaniw said.
“The quality of barley produced this season has been a disappointing result for growers, with the majority of grain being classified as feed quality,” he said.
“ABB is doing all that it can to ensure that this grain is sold at the best possible price, however we have faced some difficulties with regards to placing the poorer quality barley into the market.
“We have tried to assist growers as much as we can and provide a number of different options in consideration of this difficult season. This includes the additional flexibility that has been offered through our marketing options, providing an opportunity to move between cash and pool.”
Mr Iwaniw said that internationally, malting barley supplies were tight yet there was an abundance of feed barley in the market.
“For malting barley this has resulted in a general increase in prices,” he said.
“However there is a reluctance in the Chinese market to make purchasing commitments before the final outcome of Australia’s barley harvest is known and this has tempered the rise in ABB’s estimated gross malting barley pool returns.
“With China being a key market for our malting barley, once sales recommence there exists potential for a further lift in prices – although the final outcome of the pools will depend on the prices that we are able to achieve.
“There is a concern however that, with the level of feed quality barley compared to malting barley in the market, feed barley will be placed into the market as malting quality barley.”
Mr Iwaniw said that despite the large supply of feed barley in the northern hemisphere, domestic demand was pushing international prices slightly higher.
“However, while international barley prices have been firming for both malting and feed barley, the strength of the exchange rate and high freight rates continue to impact on the returns that we expect to see for growers.”
Mr Iwaniw said that because of the low quality of grain, supplies of quality malting and feed barley would also be tight domestically.
“Prices for feed barley in Victoria are strong and are reflecting the demand for quality feed barley in this state,” he said.
“There is a concern however that, with the level of feed quality barley compared to malting barley in the market, feed barley will be placed into the export market as malting quality barley. We have heard that this happening and it only damages the name of Australian barley in the longer term.”
Mr Iwaniw said that the Victorian feed barley pool gross indicators, which had been revised at the end of November, remained at their current levels with the gross indicators for malting 3 quality barley set at A$5/t above the feed 1 barley indicators. The feed 1 barley gross indicators are A$165-175/t for the No.1 pool and A$160-170/t for the No.2 pool.
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