European barley prices have exceeded wheat prices, but analysts expect them to decline

Amid high export demand, prices for feed barley in Europe have exceeded prices for food wheat, although barley is usually traded much cheaper, Reuters reports.

This season, a surplus of grain supplies has led to a decline in world prices. However, the supply of barley in the EU has decreased, despite this year's good harvest. This is due to active shipments of barley from France to China, reduced sales by other countries and the transition of Turkey from an exporter to an importer due to a poor harvest.

Prices for December deliveries of feed barley in the western regions of the EU and the Baltic countries are $221-226/t FOB, which is in line with wheat prices. Black Sea barley has also risen in price, and prices for barley from Ukraine and the Russian Federation are $227-229/t FOB.

According to LSEG, France exported almost 900,000 tons of barley to China and is now continuing deliveries to Saudi Arabia. French farmers have sold out all their production, so export premiums for barley are higher than for wheat. Supplies from the Black Sea region are also decreasing, so the deficit that has arisen on the market may be filled by Germany.

Barley prices are rarely as high as wheat, although absolute values are lower than last year due to large global grain stocks. With recent purchases by Algeria, Tunisia and Turkey, some farmers expect barley prices to rise by another $10/t by January.

The lack of applications in the tender on November 19, where Jordan was bidding to purchase 120,000 tons of barley, indicates a shortage of offers.

Traders believe that good harvests in Argentina and Australia will soon ease the market situation and stop the rise in food prices.

British company Frontier Agriculture says barley prices will fall after Christmas.