Australia: Quite good current barley crop situation allows analysts to increase production forecast

Ongoing beneficial rains are falling across most of the main barley regions in Australia and the forecast for the coming week is also favourable, RMI Analytics said in their early August report.

Although the crop has several weeks before its development is assured, the current situation is quite good. Under this positive situation, RMI Analytics’ crop forecast for the nation has increased to 10.84 mln tonnes.

The risk of a negative El Nino drought impact still remains a possibility but the risk is diminishing as the crop continues to hold a sufficient soil moisture profile. The main exception is northern New South Wales and southern Queensland, where dry conditions have received no relief. This region’s high feed demand has already triggered transfers of feed grains from other regions within Australia.

With the Chinese tariff on Australian barley formally withdrawn, barley shipments can proceed immediately. With global two-row barley supply being reduced, RMI Analytics have increased their export forecast for Australian barley.

Although the elimination of the Chinese tariff was highly anticipated, the reality was barley prices remained lower (the cheapest globally), but now upon the tariff news prices are steady for malting barley and down for feed.

Trade is expected to restart quickly, given China’s need for Australia to offset the reduced supply of malting barley in other origins (e.g. Ukraine, Canada). Phytosanitary issues for some shippers have been resolved and all suppliers are approved for export to China.

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