Australia: Large Northern Hemisphere crops put pressure on new season feed barley estimates
ABB Grain Ltd has reviewed its gross barley pool indicators for 2006/2007 and reduced its feed 1 estimate by $4/tonne to $166/t (all figures in AU$). The gross malting barley 1 estimate remains unchanged at $189/t, the company said July 18.
ABB Grain’s General Manager Marketing, Nigel Officer, said forecast larger international barley crops this year, particularly in the Black Sea region, were expected to keep downward pressure on international feed barley prices, at least in the near future.
“This forecast increase in international barley supply will work against a lift in international feed barley prices,” he said.
Current estimates suggested the Black Sea region would this year produce up to 32 million tonnes of barley compared to 28 million tonnes in 2005. This would result in a rise in feed barley exports from Russia and Ukraine of up to 1.5 million tonnes compared to last year.
“To further compound this, European Union crop prospects are currently rated good to very good,” Mr Officer said. “Our revised estimate for feed 1 is based largely on crop developments in Europe and the likely impact these will have on returns from ABB’s feed barley markets, particularly in the Middle East, and also recent currency movements.
“In North America, it’s a different story with barley production in Canada likely to drop. Official estimates for Canada’s crop are 11.3 million tonnes, down 10% from last year.
“A small drop in production is also forecast for the USA. As a result of recent very hot weather in North America, malting barley supplies will be under pressure; it’s expected there will be reduced export ability for malting barley from Canada.
“Overall however, larger crops across Europe and North Africa will more than compensate for smaller North American crops.”
Mr Officer said that on a more positive note for Australian growers, EU malting barley would continue to be uncompetitive in China (ABB’s largest malting barley market) due to strong EU market values and a tight supply versus demand scenario in Europe.
Gross pool estimates for 2005/2006 remain unchanged, with current estimates:
South Australian pools 2005/2006 season
No. 1 malting (closed January 24) $188/tonne
No.1 feed (closed January 24) $163/tonne
No.2 malting (opened January 24) $170/tonne
No.2 feed (opened January 24) $150/tonne
A $5/t premium also applies to Baudin and Sloop malting varieties for 2005/2006, for the final time.
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