EU & UK: Barley situation much tighter with production 4-5 mln tonnes smaller than last two crops
From an overall supply and demand perspective, the EU27+UK barley situation is static, with a crop estimate at 54.46 mln tonnes, RMI Analytics said in their early November report.
With production 4-5 mln tonnes smaller than the last two crops, the situation is much tighter and the harvest across northern Europe was challenging in many respects. The final quality is still being defined, as witnessed by the price jump two weeks ago triggered by Danish execution issues related to germination. Wet conditions in the past two weeks have slowed final winter barley seeding progress.
Given a less than ideal quality outcome on a smaller crop, the current weak demand environment has left the market rather comfortably balanced. The expectation for crop 2024 has been spring barley would gain planted area, and this view is being supported further by the delays in winter planting. There could be a much needed bounce back in 2024 barley area and a resulting higher production level, the analysts said.
There has been a fallback for French barley prices following a very exciting period around the end of October. Given the difficult crop conditions in parts of northern Europe, this recent price action is a reminder that volatility can be expected to continue.
Wet conditions in France have delayed the past portion of winter crop seeding, with progress running at around 10% behind the normal planting pace. A slight delay in wrapping up winter sowing is not influencing price action. In fact, there is a possibility crop 2024 spring barley area will benefit as a result. Also, autumn sown spring barley should maintain area, as crop 2023 results indicated November seeding performed better than earlier seeding.
Denmark has been (and remains) a key area of focus, but for now barley prices have steadied as quality is assessed. Given the challenging crop result, further export trade from this region is unlikely as available quality is kept for local needs.
The UK is also seeing some delays in the final piece of winter seeding, but this is not a concern to the market as prices are mostly unchanged. The UK and Denmark prices remain in close step with French prices. Overall EU barley exports are down: -11% so far this crop year.
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