Australia: ABB Grain Ltd cuts barley pool outlooks by A$2/tonne

ABB Grain Ltd announced on January 18 it has reviewed its gross barley pool indicators for 2005/2006 and has reduced both its malting and feed barley estimates by A$2/tonne.

The slight adjustment means that the new indicator prices are A$193/t for malting barley in the Victorian No.1 malting barley pool which closed on October 31, and A$168/t for feed barley in the Victorian No.1 pool. In the east coast pool (Victoria, NSW and Queensland) the gross barley pool indicators for 2005/2006 are A$188/t for malting barley No.2 and A$163/t for feed barley No.2.

The slight adjustment means as well that the new indicator prices are A$188/t for malting barley and A$163/t for feed barley for SA. But a $5/t premium applies to Baudin and Sloop malting varieties, although this is the last season in which this premium will apply.

ABB’s general manager marketing, Nigel Officer, said that reduced commodity prices for barley in international markets and recent currency appreciation were responsible for the amended estimates.

“There has been a fall in international malting barley prices of around 5% since late December which has influenced our revised estimates,” Mr Officer said.

“This fall has been largely driven by other exporters of Australian barley from deregulated markets on the east coast of Australia. Barley has been sold by these exporters at levels well below prevailing offers from other origins such as the European Union and Canada.

“Also, during the same timespan, the value of the Australian dollar has appreciated by more than 300 points – from a low of 0.7235 to the current position where it’s trading around 0.7540, meaning this has the potential to reduce the Australian dollar’s value of US dollar proceeds.”

Mr Officer said that despite the adjustment ABB had already priced a large percentage of its barley inventory and the company was confident that, with its current marketing strategies, it would be able to able to achieve good values for its remaining stocks.